Krishna says

Krishna says in the Bhagvad gita : "Whenver adharma surpasses the limit. He will incarnate on earth"

So, I wonder that he has not done so yet implies that the evil, which we fret about, has not transcended limits. His statements could allude to the evil within each of us and incarnate to purge, cleanse and establish dharma within us!
Did he not make a highway robber into Maharshi Valmiki, did he not transform the miser into Purandara Das and did not Kartikeya transform the flesh hungry youngster into a poet saint Arunagirinathar?
I guess, the collections goodness of mankind seeks a medium to express itself and manifests as god liners in few individuals whom we worship as saints and prophets!
So, the collective evil within all of us seeks to find an expression and manifests in few individuals whom we call as demons.

There is enough goodness outside of us and we just need only to focus our vision and change our perception on the canvas instead of the picture!

:)