This is one of three major answers to the problem of Theodicy (justifying God in the face of evil) in Christian theology. They are:
1. Pedagogical (the one you mentioned) - Evil exists so that we may grow and learn. All evil will be used to create even greater good. Quintessential example would be the story of Job in the Old Testament.
2. Eschatological — Evil is a by-product of having any creation in time whatsoever, and will be fully restored at the end of all things. Another way of thinking of this one is that evil is "non-being", the absence of the good. A lack, a privation. Espoused by Augustine (and before him, Neoplatonism in general), and Aquinas.
3. Freedom-oriented — Evil (even natural evil) is a broken state of affairs caused by the freedom of people, who use that freedom against God. God nonetheless allows this because he allows us the dignity to choose. The official teaching of the Catholic Church. The straightforward reading of Genesis 2.
None of these say that "This <bad thing> is not bad" - Christianity acknowledges the existence of evil "as evil". However, with God's grace, evil may be healed or made to serve higher purposes.
Imo 1) and 3) make little sense, e.g. no one learns anything from a toddler dying from cancer, and no "freedom" caused it.
2) looks more interesting, although I'm not sure I understand it
A toddler dying of cancer falls under the category of "natural evil" (as opposed to moral evil, in which an intention or will is involved). You're correct to say that natural evil can sometimes be difficult to explain in a pedagogical sense. A storm taking one's home can be a way to teach us our dependence on God alone, but a child being taken by cancer does seem meaningless to us at the best of times, and simply cruel at the worst.
But the story of Job (in which his family, including his children, are taken away through natural evil) shows us two ways of engaging with this kind of evil: 1) Seeing the resulting struggle with God as its own form of growth, and 2) the virtue of humility.
In my opinion, there is no "one answer" to Theodicy - it requires all three and a healthy dose of Job's eventual humility. The first has been true in my life multiple times. The second is often helpful when engaging with evil on a cosmological level. The third is helpful when wrestling with the problem of moral evil. Taken together, I think the picture is reassuring, and certainly better than the alternative (a meaningless universe of hopeless suffering).
I recommend David Bentley Hart's "The Doors of the Sea" as a good short work on this subject!
1. Pedagogical (the one you mentioned) - Evil exists so that we may grow and learn. All evil will be used to create even greater good. Quintessential example would be the story of Job in the Old Testament.
2. Eschatological — Evil is a by-product of having any creation in time whatsoever, and will be fully restored at the end of all things. Another way of thinking of this one is that evil is "non-being", the absence of the good. A lack, a privation. Espoused by Augustine (and before him, Neoplatonism in general), and Aquinas.
3. Freedom-oriented — Evil (even natural evil) is a broken state of affairs caused by the freedom of people, who use that freedom against God. God nonetheless allows this because he allows us the dignity to choose. The official teaching of the Catholic Church. The straightforward reading of Genesis 2.
None of these say that "This <bad thing> is not bad" - Christianity acknowledges the existence of evil "as evil". However, with God's grace, evil may be healed or made to serve higher purposes.