Peshat and Midrash Halakha

If the literal text indeed suggests one understanding, why do Chazal not rule in accordance with it? If, on the other hand, it is Chazal’s interpretation that is binding in any case, what is the status and value of the peshat understanding?

With regard to “an eye for an eye,” the Rambam seems to contradict himself: in Moreh Nevukhim he writes that the plain meaning of the text is that the offender's eye is actually to be put out, while in Mishneh Torah he writes that Chazal's conclusion that the reference is to monetary restitution is "implicit in the Written Law."

If the former is true, and monetary restitution for an eye is not an oral law passed down from Moshe, but rather derived by Chazal, it is possible to raise the possibility that at some stage the law of "an eye for an eye" was indeed practiced in accordance with the literal interpretation, and only later did Chazal rule that the reference is to monetary restitution. If we accept this possibility, then there is room to ask why, at some stage, Chazal moved away from the plain meaning of the text and interpreted the verses in such a way that the punishment imposed is monetary rather than physical.