Biblical Concept: Angelic Conflict, Manner of Resolution
Question: Why is God resolving the Angelic Conflict in the manner that He is? Why did God not just eliminate from existence the rebellious Angels after offering them a chance to reconsider their actions?
Answer: In eternity past, Satan and his angels successfully maligned God. They have portrayed Him as a liar (Genesis 3:1-5), bias (Job 1:10), not really their creator (see Biblical Concept: Evolution, a scheme of the Devil?), restrictive (Genesis 3:5), and unwise (Ephesians 3:9-10). For the sake of God’s integrity, and as a witness to elect angels, God did not summarily eliminate from existence the rebellious angels.
Answer: To counter successful eternity past accusations against God’s status and character, by Satan and his angels, God, in the Person and Work of Jesus Christ, became lower than angels and defeated Satan and his angels in their own territory. See Hebrews 2:14, Hebrews 10:12-13, Colossians 2:15, 1 John 3:8, and 1 Peter 3:22. God utilized the paradox of humility and aggression to document the error of those who maligned Him--and justly condemned them.
Answer: Rather than perform an annihilation of Satan and his angels, God created a repository (a lake of fire) apart from the righteous new heavens and earth. This repository acts as an eternal reminder of the subjective-accusative-volitional-rebellion by the volitional creatures God created.
Hebrews 2:14 Since then the children share in flesh and blood, He Himself likewise also partook of the same, that through death He might render powerless him who had the power of death, that is, the devil;
NAS Genesis 3:1 Now the serpent was more crafty than any beast of the field which the LORD God had made. And he said to the woman, "Indeed, has God said, 'You shall not eat from any tree of the garden'?" 2 And the woman said to the serpent, "From the fruit of the trees of the garden we may eat; 3 but from the fruit of the tree which is in the middle of the garden, God has said, 'You shall not eat from it or touch it, lest you die.' " 4 And the serpent said to the woman, "You surely shall not die! 5 "For God knows that in the day you eat from it your eyes will be opened, and you will be like God, knowing good and evil."
NAS Job 1:10 "Hast Thou not made a hedge about him and his house and all that he has, on every side? Thou hast blessed the work of his hands, and his possessions have increased in the land. (Satan addressing God.)
NAS Ephesians 3:9 and to bring to light what is the administration of the mystery which for ages has been hidden in God, who created all things; 10 in order that the manifold wisdom of God might now be made known through the church to the rulers and the authorities in the heavenly places.
NAS Revelation 12:9 And the great dragon was thrown down, the serpent of old who is called the devil and Satan, who deceives the whole world; he was thrown down to the earth, and his angels were thrown down with him. Note Revelation 20:7-8.
NAS Revelation 12:10 And I heard a loud voice in heaven, saying, "Now the salvation, and the power, and the kingdom of our God and the authority of His Christ have come, for the accuser of our brethren has been thrown down, who accuses them before our God day and night.
NAS Revelation 20:7 And when the thousand years are completed, Satan will be released from his prison, 8 and will come out to deceive the nations which are in the four corners of the earth, Gog and Magog, to gather them together for the war; the number of them is like the sand of the seashore.
 NAS John 8:44 “You are of your father the devil, and you want to do the desires of your father. He was a murderer from the beginning, and does not stand in the truth, because there is no truth in him. Whenever he speaks a lie, he speaks from his own nature; for he is a liar, and the father of lies.” The liar Satan practices projection toward God.
 NAS Luke 4:6 And the devil said to Him, “I will give You all this domain and its glory; for it has been handed over to me, and I give it to whomever I wish.” The humility of God handed the visible universe to fallen Angels. The aggression of God will condemn the fallen angels for the evil manner in which they governed the universe.