You seem to be handwaving the definition of "free will" a bit here. On some level, the laws of physics "make all my decisions", but this clearly doesn't bother me. Is it really free will that matters, or the perception of it?
If Omega felt sorry for someone and (based on their own utility function) started making subtle interventions in their life, blocking off the possibility of bad choices and opening doors for good choices, all without them noticing--they'd still be reacting to their environment and would have a higher utility. Is that bad?
Is that bad?
My own view is that there's no particular reason it couldn't be bad, if the individual concerned happened to value Omega not doing that sort of thing.
Yesterday I heard an interesting story on the radio about US President Obama's pick to head the Office of Information and Regulatory Affairs, Cass Sunstein. I recommend checking out the story, but here are a few key excerpts.
At the risk of starting a discussion that will be wrecked by political wrestling, I'm always hopeful when I hear about governments applying what we learn from science to policy. Not to say that this always generates good policies, but it does generate the best policies we have reason to believe will be good (so long as you ignore the issue of actual politices that might get in the way).