I imagine someone else has posted this, but whatever.

The idea of the underworld was created by humans simply to drive people to do good. Hell is the ultimate punishment and failure while heaven is the ultimate reward. Humans have an innate conscience, so we feel guilty when we do something immoral (such as murder another human). This created the idea of justice and such. For example, if a Greek guy says "Fuck Zeus", they believed a lightning bolt would strike him down because this was wrong (in their opinion).
Same with the idea with Fate (methinks) and Karma. You screw up, you get screwed. What goes around comes around. An eye for an eye. Hell is just the manifestation of inevitable human justice in some religions.