"Abraham drew near and said: 'The Judge of all the earth must not exercise justice too strictly'" (Gen. 18:23 and 25). According to R. Levi, the verse means that Abraham said: If You seek to have a world, strict justice cannot be exercised; and if you seek strict justice, there will be no world. Do You expect to take hold of the well's rope at both ends? You desire a world and You also desire justice? You can have only one of the two. If You do not relent a little, the world will not endure.
The gist here is that Avraham is telling God that God can't have his cake and eat it too. Either God can have perfect justice, and no world, or God can have imperfect justice and a world. The view is not only strikingly pessimistic, but it seems to contradict two basic beliefs.
The first is a belief in an omnipotent God. If we view God as omnipotent, God could enact a perfect justice if he so desired. I believe that he chooses not to because he values free will. The agadah, however, would seem to say that God is in fact limited in power. That is, God cannot enact a perfect justice without destroying the world, which would seem to place a cap on God's capabilities.
The second is a one version of the belief in an Olam Haba. If we are to believe in wordly restoration of a Gan Eden-like state, whether it be at the hand of a Mashiach, or at our own hands in an Eidan Mesichi, a Messianic Age, are we to not believe that such a world will be full of perfect justice?