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God's Justice and Mercy
To start off, it should be noted that doing a lot of good things does not exempt any of us from human law. I give a lot of money to charities, treat people well, pay taxes, etc. It could well be said that I am a good person. However, a few years ago, I received a speeding ticket. I did not go before the judge and plead "I'm a good person." I simply acknowledged that even though I am, by this world's standards, a fairly good person, I still broke a law. I realized there was a penalty for breaking the law, so I willfully paid the penalty for myself. No amount of good deeds that I could volunteer make up for my offense.
There are, indeed, a whole lot of people who live very good and exemplary lives. However, we are not judged for the good that we do, but for the offenses we commit. A doctor who saves a million lives is not exempt from the penalty if he murders only one person. Neither are we exempt from our offenses just because we do many good things. Before God, all of us have sinned and are subject to penalties for that. That is basic justice.
It is very important to note, however, that even though God's holiness is so great that He requires justice for even the slightest disobedience, His love and mercy are so great that even the greatest offense can be forgiven. Thus, there is forgiveness offered not for only the best people who live the most exemplary lives, but also for the worst of us who have sinned the greatest.
God's Judgment
It needs to be stated that God's justice righteously punished people for their offenses, yet He has done everything necessary to offer people forgiveness, taking upon Himself the penalty that we ourselves deserve.
You asked how could God condemn "good" people to torture? We should also ask how God could take the penalty for the sins of evil people? His justice can certainly be seen as harsh, even if it is righteous. His love, however, is quite extravagant, opening forgiveness for all people--not just the best ones.
That is why salvation is not of works, but of faith. Salvation by works could only be attained by a few. Salvation by faith opens the door to all people, and that is much more loving, gracious and merciful.
One more comment
I would suggest, however, that your belief on whether or not there is a God should not depend on whether or not God lets people earn their way to heaven. In doing so, one would have to charge God with a moral wrong, but implicit in the acknowledgement of a moral standard is the recognition of a moral lawgiver, which is God.
Also, someone once said, if I had a deadly disease, I would not be angered to find out there was only one cure that would heal me--I would be most appreciative. We are all sinners--those who have broken God's law to various degrees. Yet, God longs to see all people receive forgiveness that He has provided through the greatest of sacrifices.
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Preface:
This site's guidelines says that anyone who self-identifies as a Christian is considered a christian for this site. That means that if you believe in salvation by works alone, yet call yourself a Christian you are, by definition, a group (of one) that believes this. So if there is even a single group out there consisting of two people that believe this, then the answer would, technically, be "yes". And there probably are those out there that meet that definition. If there is such a thing as "Christian Atheists", why not?
It is possible that such groups exist. However, they would be considered as heretical (at best) or crackpots (more likely) by pretty much every mainstream denomination and most established non-mainstream denominations. Here's why:
By definition, the idea of salvation by works alone completely negates any need for Jesus Christ. It's hard to say "I'm a Christian, but Christ doesn't matter at all" with a straight face. It defies logic, and doesn't make sense. It's like saying "I'm an atheist that believes in God."
As pointed out in my answer to What is unique about Christianity, Christ is central to Christianity. That should be so obvious it shouldn't need to be said. The need for Christ is what defines Christianity. The central message of Christianity is that we couldn't possibly earn our way into heaven, because we are not able to meet God's standard of perfection, so He had to provide another way: Christ. Even those who believe that works of righteousness are necessary wouldn't deny the need for Christ. By any sane and logical definition, such groups would be not Christian because Christ is not necessary to the belief.