Why do bad things happen to good people
This is a special case of the problem of Evil, which relates to justice. The problem of evil is "why do bad things happen at all?" Schaeffer provides the answer already in question 4: "God is not literally omnipotent".
Schaefer's actual argument starts out:
A creation without evil would involve contradictions, which God cannot do due to q4.
In other words, Scheaffer is confusing this question of Justice with the Problem of Evil. But his answer to both would appear to be the same: an all-Just (all-Good) Universe would involve some sort of contradiction or limitation which is lessened in a Universe which allows some Evil and some Injustice.
He prefers the Best of all Possible Worlds hypothesis in which we imagine a range of possible, logically consistent, Worlds, and claim that God has created the one with the most good in it, rather than the one with the least evil. This is an important distinction since it does not require that the World be good on balance. Thus, there exist some good things which require evil in order to exist, in order to include these good things in the Universe, God is constrained to also include the evil. Conversely, a World with no evil at all would also be less Good.
Which is fine as far as it goes - except that this means that Heaven, being a World without Evil, is not much of a reward for good behavior in this one. Since Heaven must be, by definition, the best of all possible worlds, the problem of evil in this context reduces to "why not just create us in Heaven in the first place?"
The solution most Christians I meet seem to prefer is that God is not Good in the way the problem of evil proposes. He may be Good more in the manner of a good parent ... sometimes a parent has to be cruel to be kind. Thus, God hurts us in order to help us. We need not be too surprised that a Just God did not make Justice one of the Universes built-in properties.
Of course, atheism simplifies this immensely