This is a common argument, which means that many must find it persuasive, but my guess is that those who do simply haven't given it sufficient thought. It's very easy to see the flaws in it. To begin with, hell isn't only for serious evil-doers: standard Christian doctrine maintains that we are all deserving of eternal punishment and that anyone who doesn't accept God's offer of salvation ends up there. A second thing to keep in mind is that even the worst evil-doers aren't necessarily sent to hell – not if at some point they become sincere believers. Ted Bundy, for instance, claimed to have accepted Jesus before being executed, and if that's true then on the standard view he did end up in heaven.
One therefore cannot justify hell on the grounds that evil-doers must be punished. But more importantly, can one still maintain that God is just given this standard doctrine? Does it make sense that all of us are deserving of eternal punishment, or that those who accept Jesus are forgiven?
Let's begin with why everyone supposedly merits eternal damnation. One common reason offered for this is that God, due to his moral perfection, has standards that are so high that no one is good enough to meet them. Even if you are a saint, you aren't perfect: at the very least, you've probably told a few white lies. And that, the argument goes, makes you bad enough, in God's eyes, to merit the worst form of punishment.
But now consider an analogy. Suppose a father finds out his teenage daughter lied about when she came home from a party: she said she was back by 10 (as she was supposed to have been) even though she didn't actually make it home until 10:15. By the above logic, if this father punished her by chaining her to the basement wall for a week and giving her a hundred lashes a day with a belt, that would show that he has very high moral standards. His standards still wouldn't be as high as God's, of course, for the Lord demands far worse punishment for the girl, but they would nevertheless be much loftier than those of the majority of parents out there.
As to the second question – whether those who accept Jesus's offer of salvation deserve to be forgiven – consider that while Bundy is experiencing eternal bliss, any non-Christian who spent her entire life helping others and doing nothing but good deeds still goes to hell. All I can say is that if you think that's right, you have a very bizarre sense of justice.
The heinousness of this entire doctrine is somewhat mitigated by the (nowadays rather common) claim that hell isn't as terrible as advertised. Maybe it just means annihilation. Or perhaps it means spending eternity apart from God (which, however, is still supposed to be a very undesirable thing). But no matter what one says about it, the basic idea remains entirely unjust. Believing in Christianity – or in Islam, or any other dogma – does not make one the slightest bit more ethical than not believing, and thus cannot be a sound basis for distinguishing those who merit forgiveness from those who do not.