>Who decides what is ultimately evil, spiteful, or cruel? The most powerful God? Isn't that just supernatural might-makes-right?
Basically, yes. In the Book of Job, God's justification for visiting such cruelty onto an admittedly righteous man who didn't deserve it (to win a bet with Satan, no less) was, in essence, "Because I'm God, and you're not." God doesn't have to play by human rules, humans have to play by God's rules.
In many old religions, divine beings had no problem killing any mortal they pleased - and the strongest gods tended to be the most petty and violent of the lot. They were manifestations of the wanton and arbitrary power of the natural world. The Old Testament God seems to be cast from the same mold - murder is a sin, but if He commands you to kill your firstborn, you'd better not hesitate.
It's not a satisfactory philosophical answer for modern times but it is an answer. The modern version of this seems to be "God works in mysterious ways," but it's a reformulation of the same argument - God is essentially alien, and not a moral being as humans understand morality.