The Mishpatei Uziel (3:63) quotes a Doros Ha'rishonim who says that the reason it was lifted was because after Beitar was destroyed, most of the land was in control of Nochrim. The oil that was made was processed on Har Hamelech, and when people used to go to supervise the making of the oil, they would be killed. Rebbi and his Beis Din lifted this ban in order that people should not put themselves in danger in order to avoid the prohibition of Shemen Akum.

However, the Mishpatei Uziel argues on this explanation, and says that while this may have been a factor in permitting the oil (a Yerushalmi in Avodah Zarah 2:8 seems to be the source of this comment), the main reason was that it was not accepted by all of Klal Yisrael.

All the best,

Yaakov Montrose