movies

couldn't they have put people in personal heavens

From Agent Smith's monologue to Morpheus in the first movie:

Agent Smith: Have you ever stood and stared at it, marveled at its beauty, its genius? Billions of people just living out their lives, oblivious. Did you know that the first Matrix was designed to be a perfect human world. Where none suffered. Where everyone would be happy. It was a disaster. No one would accept the program. Entire crops were lost. Some believed that we lacked the programming language to describe your perfect world. But I believe that as a species, human beings define their reality through misery and suffering. The perfect world was a dream that your primitive cerebrum kept trying to wake up from. Which is why the Matrix was redesigned to this, the peak of your civilization.

From The Animatrix, Neal Gaiman's Goliath, and across the three movies, I recall that the machines did try putting humans in paradise. Their goal was to use human flesh minds to perform calculations they could not, so, to an extent, if the human could be tricked into thinking they were in paradise with a small fraction of their mind, the machines could occupy the rest (presumably to control fusion reactors, but mostly to augment the machines' cognitive abilities). The narrative implied that human minds consistently rejected utopias and paradises, spawning rogue entities like Neo and Trinity who possessed destructive abilities the machines couldn't comprehend but could empirically measure.

Basically, human cognitive abilities most valued by the machines also were inextricably tied to chaotic destruction of whatever medium the humans occupied. Like how uranium is useful for generating electricity but turns its container radioactive, melts down if unmoderated, and can create thermonuclear weapons.