The traditional view of the war in heaven has Lucifer proposing to force us all to be righteous, preventing us from sinning, and thus ensuring our worthiness to inherit the kingdom of God. This notion of compelling us to be righteous feeds the traditional understanding of what is termed "agency," which is used within the culture of the Church to mean "free will and choice." People have written paeans to, and built entire theological structures based on, this understanding of "agency."
However, it appears the traditional account of the war in heaven lacks foundation in both scripture and the teachings of the Prophet Joseph Smith.
1 And I, the Lord God, spake unto Moses, saying: That Satan, whom thou hast commanded in the name of mine Only Begotten, is the same which was from the beginning, and he came before me, saying—Behold, here am I, send me, I will be thy son, and I will redeem all mankind, that one soul shall not be lost, and surely I will do it; wherefore give me thine honor.
2 But, behold, my Beloved Son, which was my Beloved and Chosen from the beginning, said unto me—Father, thy will be done, and the glory be thine forever.
3 Wherefore, because that Satan rebelled against me, and sought to destroy the agency of man, which I, the Lord God, had given him, and also, that I should give unto him mine own power; by the power of mine Only Begotten, I caused that he should be cast down;
4 And he became Satan, yea, even the devil, the father of all lies, to deceive and to blind men, and to lead them captive at his will, even as many as would not hearken unto my voice.
It is of note that Satan offered to be the Son of God, and to redeem all mankind, that one soul should not be lost. As we know from the example of Adam and Eve, if there were to be no fall, there could be no seed; if there is no sin, there can be no redemption. Therefore, Satan was not offering to compel us to be righteous, but was offering universal redemption, regardless of the nature of the sins we would commit.
Joseph Smith gave an explanation of this event.
George Laub Journal
April the 6th, 1843 By Joseph Smith our Prophet
Now concerning Spirits First of all, or in the beginning, the great Eloheam in the Hebrew meaning the god of all Gods called a grand council &[c] and the[y] counseled to form this planet on which we are now or do dwell at present. The[y] spoke and earth from cayos [chaos] sprang by their workmanship Cayos [Chaos] being there matered mater element The[y] saw till time should be no more and the[y] spoke concerning the redemption of this world and formed limited sircumstances concerning the redemption Jesus Christ being the greater light or of more intelligence for he loved rituousness and hated iniquity he being the Elder Brother Presented himself for to come and redeem this world as it was his right by inheritance he stated he could save all those who did not sin against the holy ghost & the[y] would obey the code of laws that was given But their sircumstances ware that all who would sin against the Holy ghost should have no forgiveness neither in this world nor in the world to come, for they had strove aganst light and knowledg after the[y] had tasted of the good things of the world to come the[y] should not have any pardon in the world to come because the[y] had a knowledg of the world to come and ware not willing to abide the law therefore the[y] can have no forgiveness there but must be most miserable of all and never can be renewed again referred to 6 chapter of Hebrews
But Satan or Lucifer being the next heir and had alloted to him great power and authority even prince of power of the eir He spake emediatey and boasted of himself saying send me I can save all [he] even those who sined against the holy ghost and he accused his brethren and was herld [hurled] from the council for striving to breake the law emediatly and there was a warfare with Satan and the gods and the[y] hurld Satan out of his place and all them that would not keep the law of the councill But he himself being one of the council would not keep his or their first estate for he was one of the Sons of perdition and concequently all the Sons of perdition become devils &[c].
Thus we see that Satan's offer differed from God's on one point only – Satan offered to save even those who sinned against the Holy Ghost.
This lays to rest the notion that Satan offered to compel us to be righteous. The traditional view is just that: a tradition.
But it also opens the question of what "agency" means – how would saving those who sinned against the Holy Ghost deny the agency of mankind? Clearly, agency cannot mean "free will and choice," since one cannot sin without free will and choice; without sin, there would be no need for redemption; without a need for redemption, there would be no need for the Son of God to atone for us.
Luckily, we have other scriptural sources of knowledge concerning agency – the quality of being an agent.
35 Behold, I gave unto him [Adam] that he should be an agent unto himself; and I gave unto him commandment, but no temporal commandment gave I unto him, for my commandments are spiritual; they are not natural nor temporal, neither carnal nor sensual.
36 And it came to pass that Adam, being tempted of the devil—for, behold, the devil was before Adam, for he rebelled against me, saying, Give me thine honor, which is my power; and also a third part of the hosts of heaven turned he away from me because of their agency;
37 And they were thrust down, and thus came the devil and his angels;
38 And, behold, there is a place prepared for them from the beginning, which place is hell.
39 And it must needs be that the devil should tempt the children of men, or they could not be agents unto themselves; for if they never should have bitter they could not know the sweet—
40 Wherefore, it came to pass that the devil tempted Adam, and he partook of the forbidden fruit and transgressed the commandment, wherein he became subject to the will of the devil, because he yielded unto temptation.
41 Wherefore, I, the Lord God, caused that he should be cast out from the Garden of Eden, from my presence, because of his transgression, wherein he became spiritually dead, which is the first death, even that same death which is the last death, which is spiritual, which shall be pronounced upon the wicked when I shall say: Depart, ye cursed.
42 But, behold, I say unto you that I, the Lord God, gave unto Adam and unto his seed, that they should not die as to the temporal death, until I, the Lord God, should send forth angels to declare unto them repentance and redemption, through faith on the name of mine Only Begotten Son.
43 And thus did I, the Lord God, appoint unto man the days of his probation—that by his natural death he might be raised in immortality unto eternal life, even as many as would believe;
44 And they that believe not unto eternal damnation; for they cannot be redeemed from their spiritual fall, because they repent not;
45 For they love darkness rather than light, and their deeds are evil, and they receive their wages of whom they list to obey.
46 But behold, I say unto you, that little children are redeemed from the foundation of the world through mine Only Begotten;
47 Wherefore, they cannot sin, for power is not given unto Satan to tempt little children, until they begin to become accountable before me;
48 For it is given unto them even as I will, according to mine own pleasure, that great things may be required at the hand of their fathers.
49 And, again, I say unto you, that whoso having knowledge, have I not commanded to repent?
Thus we see that being tempted by the devil after having been given commandments by God is an essential part of our being agents unto ourselves, and that small children – while certainly possessing free will and choice – cannot be tempted by the devil, and therefore cannot yield themselves to him, and therefore have not got agency.
Agency, as used in the scriptures, therefore, seems to be what Elder Eyring has said it was:
[M]oral agency... is the inalienable right to submit ourselves to whichever of those powers we choose. - Henry B. Eyring
I would phrase it a bit differently – your agency is the right to represent yourself in binding negotiations with other parties. Thus, we see that Satan's offer in the divine council would have denied your agency by making it impossible to sell yourself permanently to the devil.
There is no reward without risk.