The knowledge of good and evil is one of the results of Adam and Eve eating the forbidden fruit. Was gaining this knowledge really that bad in the eyes of God? Did it necessitate a threat of death? Maybe if Adam and Eve knew what "bad" was they wouldn't have so easily broken God's rule. This knowledge was something that only the Angels and Demons had, and having this knowledge would have put Adam and Eve on par with them. But, it's not the hierarchy of it that is bad, it's what they could do with that knowledge. Satan lead a rebellion, for example. God obviously didn't fear that they would overtake Heaven or anything like that, but he wanted them to retain their happiness, their "glad heart" (Bk 8, line 322). This knowledge would strip them of their naiveté and innocence. He wanted his creatures to live without the burden of this knowledge.
Maybe God shouldn't have put the tree there to begin with, if he knew what the consequences of eating from it would be. That was the whole point. God created this rule as a temptation, even before there was a serpent involved. It shouldn't have been hard to follow this sole command, especially with the abundance of food throughout the garden. However, this is the same situation as when you tell a young child "don't touch that;" they will probably touch it the second they get a chance. Besides, God is all-knowing, so he'd have known that Satan would tempt them, they would fall for it, and it would result in the Fall from Eden.