First, the Bible never says anything about homosexuality. The idea of sexual orientation simply did not exist in that time period.
Second, one can not take the Law out of context. One can not rely solely on just the written Torah, they must also consent the Oral Torah. The oral Torah changes with time, and builds upon itself. It is worth noting that there is a movement within Judaism that is looking at verses such as these and trying to understand what they truly mean.
Third, one has to realize that the death penalty may have been the written consequence, but it was hardly enacted. That is because when one takes the whole law into consideration, murder simply is not really tolerated.
Fourth, in order for this verse to reflect on God, one has to assume that the Bible is the literal word of God. One has to basically have the mindset of a fundamentalist. That simply is not a very good mindset to have. If one studies the history of the Law, one can see that it was not all set down at one time. That, like modern laws, it was added to, edited, etc. And the driving force behind the change is humans. Now, some may feel or believe that God had a hand in this, but it would be a stretch to instantly assume that everything in the Bible reflects personally on God. Humans still have choices, and humans make law.
Finally, in a historical point of view, the problem, in my opinion, was that the Hebrews were trying to build a nation that was different from the others that surrounded them. So there are two factors here. First, since other nations indulged in homosexual sex, the Hebrews wanted to differentiate themselves from that. Second, one can not build a nation by homosexual sex. It simply is not possible. So, it could be seen as basically sabotage. And really, that would have been somewhat logically. Since they were unaware of the idea of sexual orientation, a man having sex with a man then was out of choice. That choice did very little to help expand the nation (and again, in their minds it was a choice, as they did not understand sexual orientation).