GOP Capitalist started a thread which discusses that aspect of the question, called "Understanding Islam - from early western roots to today's fundamentalism". I encourage you to read it. Basically, a skeptical view about the power of human reason came to dominate medieval Islamic thought. Chesterton notices some similar tendencies in certain schools of modern thought in the west and explains the practical issue thus -
"...there is a great and possible peril to the human mind: a peril as practical as burglary... That peril is that the human intellect is free to destroy itself. Just as one generation could prevent the very existence of the next generation, by all entering a monastery or jumping into the sea, so one set of thinkers can in some degree prevent further thinking by teaching the next generation that there is no validity in any human thought... If you are merely a sceptic, you must sooner or later ask yourself the question, "Why should anything go right; even observation and deduction? Why should not good logic be as misleading as bad logic? They are both movements in the brain of a bewildered ape?" The young sceptic says, "I have a right to think for myself." But the old sceptic, the complete sceptic, says, "I have no right to think for myself. I have no right to think at all." There is a thought that stops thought. That is the only thought that ought to be stopped." - Chesterton
The authority to engage in real interpretation must stem in the end from a confidence in the power of human reason to arrive at the truth. Early Islam had that confidence. The philosophers had that confidence. But Ghazali did not, for reasons as perennial as philosophical skepticism, of the sort you also see e.g. in Hume, or the modern relativists, or radical historicists and postmodernists. Ghazali has the additional motive that the disorganization and uncertainty he can forsee from falliable and skeptical human thought, he doubts will manage to maintain a tradition of religious orthodoxy. Whereas literalism can. In a way, he combines the motives of Hume and Luther in the west.
Rahman understood the need to revive the idea of interpretation in Islamic theology. He faces the difficulty of maintaining an flexible and living, but still orthodox tradition, squarely. For him, men must be "authorized" to engage in interpretation to adapt the moral maxims of their faith to the conditions of later times. They must trust their reason that far. The requirement of substantial (but not uniform) consensus (especially of the learned), authoritative interpretation being restricted to faithful muslims, and the status accorded to the moral principles seen in the examples of the Koran and hadith, are meant to anchor this "living tradition" process.
Many of the ideas involved in this approach are more reminiscent of the catholic position on theological interpretation in the west, rather than the most common protestant one, with its emphasis on literalism. But that analogy is not completely correct, as there remains no hierarchy or central authority governing interpretation, simply the consensus of the learned "clergy".
Certain would-be reformers of catholic practice have sometimes called for a similar role for near-consensus of the learned. The 19th century liberal catholic thinker Lord Acton did, for instance, around the time of the first Vatican council (although he, wrongly in my opinion, insisted on consensus being 'complete'). In the high middle ages, Marsilius of Padua advanced somewhat similar ideas as reforms of the papacy. Each of those men were influenced by medieval philosophy, the first in its Acquinas form, the second as Averroism. Both of those, in turn are representative of the medieval philosophy Ghazali rejected.
I hope this helps.