Did you know that the commonly-held concept of Hell is not supported by the Bible?
There's mention of a lake of fire, and the word "hell" does come up, but there are definitely no pitchfork-weilding monsters eternally abusing dead people for unrepentant ox-coveting, etc.
So why did church leaders come up with it?
Answer: It has a certain appeal.
What is that certain appeal?
Answer: (this is an easy one) It instills fear.
I can imagine some early Christian leaders discussing the idea behind closed doors:
Pope Magic the Severalth: Gentlemen, numbers are WAY down. We need to think outside the book...
St. Misbehavin: Let's tell 'em they'll be tortured forever - like, even after they die - if they don't start fillin' them seats, and the collection plates!
Bishop Tonightspawn: Er, I think that might be a bit too much...
Pope: No, no! I think he might have something here. We've TRIED temporary torture. Doesn't work - they just keep dying. Let's explore this "forever" angle.
Bishop: They won't buy it. There's no biblical evidence.
Saint: Bullshit. There's the whole "cast into a lake of fire" bit.
Pope: (nodding, excited) Right, right!
Bishop: Granted, but that seems pretty finite to me. I mean, wouldn't they just burn up?
Pope: Oh... Uhm... (glances over at St. Misbehavin)
Saint: Well, they - Who's to say their skin can't keep growing back? They'll buy it. (glances out the window at some wild-eyed congregants holding "God Hates Sodomites" signs) Think about who it is we're talking about here...
Pope: We're done, then. A threat of eternal suffering it is. Nice work, boys! Get some pamphlets printed up for next Sunday!
Bishop: Jesus Christ...
Pope: Hey, watch that shit!
Bishop: Too soon...?

Hell is Very Bad
There is a holy assload of scriptural quotes suggesting that our post-life options are limited to death (obliteration), and heaven (life everlasting).
And consider this. In Jude 1:7, we're told that, because some of their citizens were into blowjobs and backdoor action, the entire cities of Sodom and Gomorrah suffered eternal fire - the cities themselves burned forever. Now, it's unfortunately true that cities in the Middle East have been known to burn from time to time, but so far, they've always gone out eventually.
So the "forever/eternal" concept is tossed around fairly loosely in the bible anyways.
The unsettling truth is, there's only one sort of Christian church in North America whose attendance has not dropped dramatically over the past couple decades. Those are the fire and brimstoney-type denominations (the Pentecostals, and fundamentalists of all stripes).
Why? Here's my guess at part of the reason:
In this mostly cozy, take-a-pill-if-you're-sad society, the reward of Heaven isn't a good enough reason to dismiss both science and rational thought. Who needs "Heaven" when we've already got the internet, iced cappuccinos and Selective Serotonin Reuptake Inhibitors?
What IS needed to get the drones back into the temples is the fear of being eternally sentenced to a non-cozy, no-pills-when-you're-sad prison, filled with mean and scary monsters.
Next week, we'll be looking at Hell's slightly less-infernal cousin, Heck. It's a very bad place too, but not as profane. Plus they have a gym, a multi-faith chaplain, and conjugal visits every fifty millennia.