We really should not be surprised that Pope Benedict has lifted the excommunication of an anti-Semite Holocaust denying Bishop. The Bishop, Williamson, involved was excommunicated for being a supporter of Lefebvre. who created a schism in the Church by opposing the decisions of Vatican II and most especially the requirement that the Mass be said in Latin. Since Benedict never saw what the fuss was about, and only supported the excommunication because of his belief in the importance of unity and discipline, and the issues involved are largely dead, and he himself is gradually trying to drag the Church back to the days of Pius XII, why would he not lift that excommunication?
It is not as if he himself gives a tuppenny damn about the Holocaust, not really.
The most evil and reactionary Pope since the 50s is acting like the most evil and reactionary Pope since the 50s. This is not a shock.