The atrocity of the Akallabêth

[Thenamir]

But is good different only due to our limited knowledge, or are we talking about two incompatible types of good?

I think it goes without saying that there is a single standard for morality, whether it is Eru's or man's. The difference is that our access to information is limited, we cannot see all the facts. We are forced to make decisions based on incomplete (but hopefully sufficient) information. This means that we will occasionally come to wrong conclusions, we will make mistakes, we may take wrong actions, even if our intentions are good.

Eru is not under this limitation -- He has all the facts (both of actions and intentions), he has perfect wisdom, and therefore is able to render flawless decisions (and therefore judgements), decisions which may seem cruel or random to our flawed and incomplete perspective. It is not an issue of quod licet jovi, non licet bovi (loosely translated "what is permissible for the gods is not permissible for men") -- it is a matter of the complete versus the partial, the perfect versus the flawed.