I've read this in other Lewis (Screwtape, I think)--and I thought it telling that evil has no substance with which to work, only those good things which it has corrupted. I'm reading Lord of the Rings again and this comes up there too (the Orcs and Trolls being corruptions of the Elves and Ents, etc.). I've heard Lewis and Tolkien were fast friends, and I can see they had quite an impact on one another.
That shadow is real enough ... it can kill some for lack of light, send a chill through others and even tempt some to use it as handy cover of sorts for those actions or thoughts they'd just as soon not see the light of day.
It's still only real for being a shadow, though. It has no substance save in the choice of the will to tilt ... and exists only for so long as the crooked can be made -- by whatever props they can muster -- to stand thus.
This is good theology, from the Orthodox POV, which focuses more intently than Western Christians on the restoration of a fallen cosmos, transfigured through the Resurrection. This is what it means to be living no longer in a dispensation of Law, but one of Grace. Sin is no longer the transgression of a legal code; it is alienation from God. Since God is everywhere, that place where God is absent must be no-place, nothingless, non-being. Hell, as Lewis rightly observes, must be very small indeed.
Quenot puts it thus:
“The fault of Adam stems fundamentally from a lack of love, which destroys communion with God. His willful submission to the temptation to power and to envy turned him into a predator who could no longer see the value in a creation directed toward the praise of God. Rather, he could regard creation only as an object of consumption. Ingratitude toward God was thereby aggravated by profaning of the cosmos that transformed creation into a mere material object...
“The expression, ‘kingdom of Satan’ is a misnomer, since the supreme imposter is the incarnation of evil, the source of death, meaning nothingness. We are forced to use words to express the reality of hell, a place of darkness and, consequently, of death. Life, on the other hand, together with any authentic personal encounter, requires light.”
It would appear that we’ve been using different tools to get to the same destination. As Flannery O’Connor observes, “Everything that Rises Must Converge.”