(This is part 2 of series on the Problem of Evil)
The essential idea with this Theodicy is that God should be judged by some higher, divine morality. From the perspective of this higher morality, what is described or characterized as evil by human morality is actually good.
Like the The Greater Good Theodicy, this Theodicy ends up denying the existence of evil. What we take to be evil is really good. And so it fails the basic test of maintaining all four claims of the paradox (see the original post).
Another problem here is that it sets human morality at odds with the higher divine morality. If the higher morality is going to judge the Holocaust, fatal disease outbreaks, etc, as good, while human morality will judge them bad, then the 'good' in each of these moralities are different. Good on the higher morality is not what we mean by good.
But, then, which good is being ascribed when we say God is all-good? If it is the human morality usage, then we appear to be right back with the paradox. If it is the divine morality usage, then maybe we resolve the paradox but at the cost of understanding. We don't know what divine morality means by good if it would describe the Holocaust as good. Moreover, we have no access to what divine morality is. So, we do not understand what all-good means.
Some theists will accept this. God is obscure (as Patrick mentioned in one of the comments to an earlier post). But if we are aiming to get an understanding of the problem of evil and get to some comprehensible resolution, then this is not an answer. The only reason to engage in Theodicy is because one is uncomfortable with paradox presented by the problem of evil. If one is satisfied with obscurity, I doubt the paradox would be all that disquieting in the first place.
The central problem, then, with this Theodicy is that it makes 'good' incomprehensible, and so the whole Theodicy is incomprehensible.