Paidion, I think that is a good and humble summary of this standard and ancient response to the problem of evil. The answer is suitably humble, because I don’t think it is a very good answer. It is, nonetheless, popular across the church in part because Augustine has been such an enduring influence. Still, I don’t think it is satisfying at all, on its own. And I think we can do better.
If you really wanted to be Augustinian about it, I think you could supplement it with “evil is the absence of good, like dark is the absence of light.” Putting them together, you can say things like, “Freedom, as a higher good, is itself a form of light, and it must be spread through the exercise of true freedom, like that which is found in Christian love.” That could be a fun project, but I still don’t think it gets you to an argument as simple and compelling as a theodicy of “overcoming.”
I also think that Augustine’s story of original sin has some major problems. As a theodicy, I think it just makes things worse. Ok, so God permits (and maybe permits at a remove, as you suggest…I don’t think it matters much to the argument) Adam to make a decision that screws up the entire cosmos. It causes earthquakes and carnivory and everything else that sucks. And God basically set him up for this: he put him right in the middle of this highly hazardous situation, and let a snake into the garden to entice him. I think that beings are morally culpable for the situations they construct. Governments are culpable for how they manage their currencies and markets, even if they aren’t micro-managing each decision. Prison builders and legal systems are culpable for the behaviors their prisons encourage. To try to acquit God on this basis is, I think, deeply morally problematic; even impotent system builders like us should be held accountable for the systems and situations we set up. How much more accountable should an omnipotent system builder be?
Aside from these moral problems, I don’t think this account of the fall gets the thrust of the story quite right. While it isn’t immediately germane to the topic, I’ll just note that Augustine’s influence on the Eastern churches was far less, and the way they understand and tell the story of original sin is different as a result. Overall, I think they are closer to the mark: original sin is about the capacity of death, and things like the fear of death, to rule us. It isn’t that it caused earthquakes, but that it gave/gives earthquakes (and kings and rulers) the appearance of ultimate power over us, through their power over death. But the doctrine of original sin is another conversation; it is worth noting, because I think theodicies are also worth discussing because they structure our other theology in important ways. My rejection of “freedom” as my primary theodicy relates directly to my rejection of Augustine’s construction of “original sin” as my primary reading of Genesis; I’m all for the doctrine of original sin, I just think Augustine got it rather wrong.
On your points regarding permission: While Genesis doesn’t tell us that God explicitly and directly permitted Satan into the garden, on the pattern of Job, we don’t have much ground for objecting to the principle that God would do that. In Job, the permission is highly explicit and direct. So while the notion that God doesn’t explicitly permit everything is helpful in some ways … for example, it helps discourage you from begging God to find you a parking space … I don’t think it accords with the Biblical material on evil, in particular, very well. And, if you want to defend the classical conception of God (w/the three omnis), I don’t think this lets God off the hook, anyway. I think system builders are responsible for what happens in their systems. That means God is responsible for what happens in creation, and is responsible for the effects of free will. I think the force of the free will argument derives precisely from the fact that it is an example of a higher good that is only possible if some evil is permitted. However, I think Chrisguy summarized some compelling objections to this. I would state those objections this way: if the main point is freedom, how is it freedom-enhancing to allow one person’s decision to restrict the freedom of so many other people so thoroughly? Or: why should someone have the freedom to imprison, torture, and otherwise so thoroughly restrict the freedom of others? How does crushing a child in a collapsed building enhance that child’s freedom?
Then you have the psychological and neurological arguments against freedom: we aren’t radically free after all. If there is such a thing as free will, it seems it is exercised marginally and often in the gaps. It isn’t remotely clear why so very much evil is required to achieve so very little freedom. And this is supplemented by plenty of Biblical material about God limiting peoples’ freedom; stopping up their ears, blinding them, obscuring the truth. So if part of the goal of a theodicy is to reflect and sum up the Biblical material well, freedom is also a pretty crummy answer.
For all of this, I think there is something to freedom. It does have a bit of explanatory power. I think it is a higher good, and it is a perfectly useful example of a higher good; I think Plantinga made appropriate use of it in his response to the logical problem of evil, for example. But I don’t think it is terribly satisfying, or the best response available. I think it is morally problematic, involves a large number of trecherous steps and so amounts to a weak response to the logical problem of evil, doesn’t make good sense of much Biblical material, and easily leads to a practice of complacency. What’s more, I think it leads to a rather warped conception of “freedom.” I think that our understanding of freedom itself suffers when it is pressed into service as the primary theodicy, and the end result is that using freedom as a theodicy tends to make us less free. But that, too, is a conversation for another day 
More generally, I think the broad discomfort with theodicy is largely a result of the fact that “theodicy” generally points people to this particular, crummy, theodicy. The crumminess of this highly popular theodicy has given theodicy itself a bad name. But to discredit the enterprise of providing theodicies based on the crumminess of this theodicy is like discrediting the enterprise of eating, on the basis of the crumminess of a rotten apple. Or, to cluster metaphors, since Augustine, the church has been pounding on this nail with a screwdriver. No wonder they think that this nail damages your tools, and doesn’t go in all the way! Not bad advice, if you don’t have a hammer.
