IMO, people need to have something to look forward to when they die.
It's a happy coincidence for me, but it sounds as if you are speaking of a specific religion, unless people believing in reincarnation (instant breakfast) are looking forward to the unknown possibility of what they'll come back as, for one.
As for faith explaining why bad things happen here on earth, it seems as if people want to choose one of two things to believe about faith. Bad stuff happens for a reason, or how can you believe in a God that would allow bad things to happen.
If "following rules" is the way to inner peace/salvation in the religions you're basing that belief on, you may wish to keep looking, or define what religion you are speaking of. Legalism will exist in all religions - it's one of the reasons people keep redefining what's "right" - which very few religions are based on, if any. I'm not certain what Judaism is specifically based on, but that's the only "religion" that seems to be based on "following the rules".
If the religion you believe in is based on controlling people, I'd wonder about what it is you believe in myself. Most, if not all, religions aren't about controlling people, they're about giving people something to put their faith in. Due to their beliefs, people will control themselves based on their beliefs.