I think there is a misunderstanding here. By saying that something is objective because it is rooted in an actual existence, it means that all values have objective meaning because of the things' existence. Epistemic concerns, about how we know whether some action is good or bad, or to what degree, are irrelevant to the argument. Furthermore, God allowing an action to happen says nothing about the morality of such an event. For morality isn't said to be grounded in God's actions or allowance, but within His very nature. To say that something is right or wrong because God would/wouldn't allow it would be to say that morality is grounded in God's actions -- something that would make morality subjective and wholly inapplicable to us who have not the qualities of God.

Keep in mind that we are defining morality to be rooted in the existence of God. We aren't saying that if you are like God you are moral -- while that may or may not be true, that isn't what the argument claims. In the same way, the 2D (second dimension) has height rooted in its existence. That isn't to say you have to be like the 2D in order to be tall -- while it may be true that the more of the 2D you are, the taller you are. It is to say that because of the 2D you can be tall or short. In the same way, because of God you can be morally good or bad.

I think, for the sake of defending your point Crash, you're seeing something like this:

1) If Fairies do not exist, then fairy-likeness does not exist
2) Fairy-likeness does exist
Therefore Fairies exist.

And you are seeing that to be analogous with the Moral Argument. Now the problem with the connection between this the fairy-argument, and your god-likeness argument, as you may know, is with premise (1). In that something only needs to be defined and conceivable, not actually existent, in order to have its likeness actualized. And yet, those conceptions are a mere collection of actually existent qualities wrapped together and named as a certain thing. A fairy is defined as a miniature person with wings that glows with the ability to grant a wish; that is, use their volition to make true a premise that utters out of the wishful mouth of its subject. But those things -- they are objective. Wings, flight, light, short size, volition, people's wishes, etc.. Merely collecting them together allows for someone to create a "likeness" that can be attributed out of a conception. But because a fairy is a conception, it is not to say that Fairies exist, but that which the fairy is conceived upon exists.

So what is your god-likeness saying? Is it doing the same thing? No, in fact it cannot. Because fairy-likeness can be derived to its base qualities of actual existence, and then can be seen to be objective or not. But God-likeness, in terms of morality, cannot be a conception -- it cannot be derived from any other actually existent thing. Which is why, in order for morality to be objective, God could not be a mere conception but an actualization.

I hope that clears up things a bit.

Now, for the sake of addressing your comments regarding the fact that God allowed the holocaust to happen, it is also important to bear in mind what exactly the argument is trying to say. We aren't saying that morality is founded upon God's actions, but that it is founded upon God's nature. If morality gets its meaning based on what God allowed to happen, then morality would not only be non-objective, but every event that actually existed, no matter how contrary, would be of the same moral value. Such a view of morality is implicitly incoherent. And no one holds to that. So don't worry about going farther with that angle of inquiry. God's allowance of events isn't what morality is grounded upon. It is the nature of God that the argument claims morality finds its objective basis.