Well for me, the fact that the fossil evidence exists doesn't refute God's existance, it only calls into question certain things int the Bible, a book I think can be unreliable at times. The fact that the fossils exist to me doesn't mean that God wants us to be atheists, he could instead be saying, "Here, look what I made a long time ago. Wasn't it cool?"
I also don't think he is worried about intellectual competition... but some churches might be.
I think that the reason why Christians call such thinking into question is apparent with scriptures like 2 Timothy 3:16-17:
16
All Scripture is God-breathed and is useful for teaching, rebuking, correcting and training in righteousness, 17 so that the man of God may be thoroughly equipped for every good work.
(Emphasis mine)
If you are going to appoint to God certain characteristics like omnipotence, omniscience or perfection, then you can't very well go around doubting his word when it becomes too troublesome to accept. I understand that it is archaic and quite unfit for modern society in terms of science and history. I understand that it was written by man and translated, copied and recopied and translated numerous times. But it would make sense, in a weird way, to assume that if God is truly all-powerful and his word is truly for the ages and perfect in it's conception, then it would survive such conditions with it's message intact and wholly accurate. To pick and choose denotes a cookie cutter approach to scripture and a distrust in God's word and instead place a trust in
your ability, a mere human, to know the mind of God and pick and choose what you
think would be acceptable to
him when in fact, since all scripture is God-breathed, then all scripture is deemed acceptable.
I was playing devil's advocate here, but I do respect the fundie's because they don't wince at all the bad in the Bible and they place more trust in God than the Christian who decides that all the bad stuff in the Bible was placed there by men and only the good stuff must be there according to God's will.
I think that either the Bible was written by men and the errors and inconsistencies are due to the fallibility of the ancient culture that spawned it and it should be treated as insight into an ancient culture and not much else or you accept the conditions of the religion as it is stated and the Bible is the word of god and should be treated as such.
I think the former is true, but the latter gives the proper treatment of the material according to the religion itself instead of attempting to fit it into a hundred different world-views to allow it to conform to each passing society's rules and technological advances. I don't think it was written for the modern western world, but the modern western world constantly attempts to shape it as though it was. There are far more consistent and benevolent philosophies out there that are resistant to such varying interpretations that it's a wonder why the thinking person would bother with this one at all.