Why did Cardinal Ratzinger stop supporting a literal interpretation of creation in Genesis? I read that Cardinal Ratzinger stated the story in Genesis 1 and 2 should not be interpreted as a literal account of the beginning of things. In spite of recent events like this, they have always been in favour of a literal explanation of creation based on Genesis. This is what I read. Why does Ratzinger hold this view on such an important matter?
Ratzinger writes at such length as to obscure the point, in my opinion.  If you read the Catechism of the Catholic Church, 283 (2nd ed.), the reasoning is spelled out in a brief and clear form:


  The question about the origins of the world and of man has been the
  object of many scientific studies which have splendidly enriched our
  knowledge of the age and dimensions of the cosmos, the development of
  life-forms and the appearance of man. These discoveries invite us to
  even greater admiration for the greatness of the Creator, prompting us
  to give him thanks for all his works and for the understanding and
  wisdom he gives to scholars and researchers. With Solomon they can
  say: "It is he who gave me unerring knowledge of what exists, to know
  the structure of the world and the activity of the elements. . . for
  wisdom, the fashioner of all things, taught me."


That is, they recognize and appreciate the value of scientific studies for the information they yield about matters including the history of the universe and life on earth.  This is entirely consistent with their stance that faith and reason can never truly be in conflict (CCC 159):


  Faith and science: "Though faith is above reason, there can never be
  any real discrepancy between faith and reason. Since the same God who
  reveals mysteries and infuses faith has bestowed the light of reason
  on the human mind, God cannot deny himself, nor can truth ever
  contradict truth."37 "Consequently, methodical research in all
  branches of knowledge, provided it is carried out in a truly
  scientific manner and does not override moral laws, can never conflict
  with the faith, because the things of the world and the things of
  faith derive from the same God. The humble and persevering
  investigator of the secrets of nature is being led, as it were, by the
  hand of God in spite of himself, for it is God, the conserver of all
  things, who made them what they are."


In this case, the scientific evidence against a literal reading of Genesis is so overwhelming that if truth cannot contradict truth, it suggests that the error is to read Genesis literally.  I do not know why it took so long for the Catholic Church to recognize this, but the current position is internally consistent and reasonable.

If they were to continue to insist on a highly literal interpretation, they would have had to drop their position on discrepancies and simply state that faith wins.  That would have been a much larger doctrinal change than maintaining (as they do, to my understanding) that Genesis 1 and 2 is spiritually accurate without being a literal account of all events.

More on this topic can be found in a large number of places, including here.