On the Purpose of Fiends
If you're familiar at all with my Alternate Ecology series and Alternate Cosmologies, you'll notice a unified theme. Everything inside creation is there for a reason. It's part of creation. Thisngs from Outside, from the Far Realm, however it is conceived, are not. They are purely and utterly wrong and out of place, even for those few that are not 'evil'. A flumph is still an unnatural aberration. (NO they will probably not get their own entry.) So...why fiends? Why evil? What exactly is the overarching purpose of allowing evil in a world, and hardship, and having devils who tempt and judge and punish....and demons who destroy, corrupt, and confuse?
Let's dive in.
We'll start with the easy part. Fiends on the diabolic end of the spectrum are lawful, almost exclusively. They are creatures of rules, and contracts, and draconian laws, and harsh punishments. They find that which breaks the laws of the universe, or the laws of morality, and they punish it. They bend the rules so that they can better catch those who break them. It is clear in most versions of the DnD and/or Pathfinder multiverse that devils are more concerned with the war against the demons, the Eternal Blood War, than they are with mortals. Why is that? Ask Asmodeus. Devils exist precisely because the celestials were too weak, too sentimental, to do what needed to be done to safeguard the new creation from demons, and worse, from what had made demons what they were.
So Devils are the real cops of the omniverse. They hold the line against encroaching chaos. But more importantly, against Khaos. Against that which is not and cannot be allowed to be. That which would render all to nothing. The temptation bit is like military recruiters. They never have enough souls to fight the war, so they get them any way they can.
We'll stop in the middle for a minute, with Daemons. In Pathfinder they just want everything dead. They want to end things. Doesn't seem very neutral to me. In DnD, they seem to be a less powerful middle ground between the extremes of Law and Chaos. But what if they aren't? What if they were originally supposed to mediate between Law and Chaos, rules and freedom? But like most things on the Lower Planes, they became corrupted. Why is that? Because they are closer to the outside. Lower isn't just a metaphor. Up and left on the Great Wheel are the furthest from the Outside, down and right are the closest, until the Abyss bleeds into the Far Realm and vice versa. At any rate, the corrupted Daemons still act as go betweens, and as mercenaries.
What were demons for? Well...that has two answers. The original forces of Chaos were built as a balance, a release valve. But they were too close to outside. So Sin and Freedom at all costs became tainted with destruction and the mindless empty hatred of Khaos. The obyriths, manifestations of the Far Realm on the inside, were tainted by the demonic sins and freedoms in turn, creating a horrific mess that doesn't suit either original purpose...it just destroys. And so the devils, as vile as they are, are so much more important.
For the full picture, read these as well:
Alternate Cosmology of the Far Realm