If we did not have pain in this world, we would not be able to tell the difference between good and evil. Suffering makes it clear that the world is not how it should be. Pain demonstrates the difference between good and evil.
Why did God allow pain and suffering to be such a large part of the human condition? I find it interesting that the very moment that sin entered the world, pain and suffering did as well. Many people say that suffering is the result of sin, but perhaps it is something more. Pain and suffering can cause tremendous growth. One reason God allows pain and suffering is to drive us to Him, to look to Christ in our need. To sanctify us. To drive out sin. When sin entered the world, suffering was the consequence, and it was also the cure. Our sin gave birth to pain, but Jesus' pain killed sin.