I'm gonna go with the Bishop not being evil like everyone thinks, he seemed to have some sort of understanding of the Gracefeel prayer that Will told him. More specifically the line of "Life proves that Death exists". I'm going to go with him having a loved one passing away and losing faith - hence why he no longer performs miracles. It could also be due to whatever price he had mentioned to Will.
I also like how the Bishop respected Will, with how Will was treated the Bishop kindly - even taking his words to heart. Good stuff.