Q. One thing I really struggle with is the horrible things that people have orchestrated in the name of God. Offhand I can think of the Crusades and the Jonestown massacre, just to name two. I understand our sinful nature and free will, but why on earth does God, whom I believe is still in charge, allow tragedies to take place that claim to come from God but clearly aren’t? It occurs to me that this makes sharing the gospel a bigger challenge. Does the Bible provide any clue as to why this occurs?
Your question makes me think of the incident recorded in the gospel of Luke in which, at least according to some early manuscripts, when a Samaritan village refuses its hospitality, James and John ask Jesus, “Do you want us to tell fire to come down from heaven and consume them, as Elijah did?” Jesus replies, according to these same manuscripts, “You do not know what manner of spirit you are of; for the Son of Man came not to destroy people’s lives but to save them.” (See the translators’ notes in versions such as the ESV.)
Apparently the most reliable ancient manuscripts don’t contain the reference to Elijah, or any specifics of Jesus’ reply to James and John (they just say that “he rebuked them”). Bruce Metzger writes in his Textual Commentary on the New Testament that the longer version of the story likely incorporates “glosses derived from some extraneous source, written or oral.” If that’s the case, they may actually preserve a genuine tradition coming down from Jesus that wasn’t included originally in the gospels. Alternatively, they may express an early understanding of what Jesus likely said to James and John on this occasion, based on his undisputed statements that “the Son of Man came to seek and to save the lost” and that “God did not send his Son into the world to condemn the world, but to save the world through him.”
Either way, the point is that starting with Jesus’ very first disciples, people have mistakenly thought they could and should wreak destruction on others in the name of God. Jesus’ answer to James and John, however it has come down to us, shows that such people have the wrong spirit; they don’t realize that the mission of Jesus, and thus of his followers, is not to destroy people’s lives, but to save them.
I believe that God doesn’t actively intervene to stop such people for the reason you cited—the free will He has given to us, which allows us to choose loving, gracious, life-giving actions, even as it also permits us, if we choose wrongly, to be destructive.
You’re right that this creates problems for what we might call God’s “image” in the world. (In biblical terms, it robs him of His glory.) Certainly if people evaluated God by the worst actions of those who claimed to follow Him, few others would choose to follow. But I believe the proper response for sincerely concerned followers is to redouble their efforts to bring honor and praise to God through generous, loving actions towards others. These will correct the misimpression that violent actions create and help people understand what God is truly like.
In other words, rather than expecting God to intervene from heaven to stop people from doing violent actions in His name, we should recognize that God is expecting us to do loving actions in His name that will preserve His reputation in the world and bring Him the glory and honor He deserves.
Good Question 
I appreciate this sort of honest question and wanted to mention a few other points that have helped me (Mostly drawn from material by Ravi Zacharias and Tim Keller)
Firstly, it is important to remember that no object, philosophy, or religion, should be judged on the basis of abuses to its fundamental teaching or purpose. For example, we wouldn’t ban frying pans because someone used one at some point to injure someone else. Clearly that would be an abuse of what a frying pan is intended for. Similarly, as pointed out in this article, such evil uses of the Christian religion go contrary to its actual teaching and therefore have no real bearing on arguments about its goodness or badness. What is much more concerning (in my opinion) are the instances where massacres and genocides were commanded by God and therefore morally obligatory…
Secondly, in regards to those who bring up such “points” against Christianity such as the crusades and etc, they can be reminded of the (greatly more devastating) destruction and loss that has come when atheistic or secularist regimes have had their way in the world. Anything from Stalin to Pol Pot. There is nothing about the materialist / atheistic view that gives intrinsic value to human life and it is therefore not an abuse of such worldviews to commit the atrocities the world has witnessed in the 20th century.
Finally, people such as Christopher Hitchens and Richard Dawkins, have argued that commitment to religion or religious belief – fundamentalism – will invariably lead to radical behavior and evil in the world. What they have apparently not observed is that it all depends on what the fundamentals are. In Christianity, the fundamentals exist in a man who loved and died for his enemies displaying no animosity and who offers forgiveness and requires forgiveness of ones enemies. How can such fundamentals, if truly applied, lead to radically evil behavior? I would say, they can certainly lead to radical behavior, just not evil behavior.
Thank you very much for sharing this additional helpful thoughts on this question.