Purgatory: are Roman Catholics losing our religion?

While I am not really prepared to write extensively about Indulgences, which still exist (during his pontificate Benedict XVI sought to revive the practice of obtaining indulgences according to the manner in which they were reformed after the Second Vatican Council), in light of this passage from Lumen Gentium, "if any abuses, excesses or defects have crept in here or there, to do what is in their power to remove or correct them, and to restore all things to a fuller praise of Christ and of God" (par. 51), it is important to note that, at least early on, Martin Luther did not oppose Indulgences in principle.

In writing a short treatise on the theology of Indulgences, which he addressed to Archbishop Albrecht of Mainz and Magdeburg on the fateful day, 31 October 1517, the still-Augustianian friar noted:

Although indulgences are the very merits of Christ and of His saints and so should be treated with all reverence, they have in fact nonetheless become a shocking exercise of greed. For who actually seeks the salvation of souls through indulgences, and not instead money for his coffers? This is evident from the way indulgences are preached. For the commissioners and preachers do nothing but extol indulgences and incite the people to contribute. You hear no one instructing the people about what indulgences are, or about how much they grant, or about the purpose they serve. Instead, all you hear is how much one must contribute. The people are always left in ignorance, so that they come to think that by gaining indulgences they are at once saved

The promulgation of a revised and reformed Enchiridion Indulgentiarum with the Apostolic Constitution Indulgentiarum Doctrina: Whereby the Revision of Sacred Indulgences is Promulgated, given 1 January 1967, represents just one of many ways that the Second Vatican Council completes the Catholic Church's response to the Protestant schism, which response began with the Council of Trent, which, in addition to responding, reforming, and clarifying, was also forced to react in various ways. In this Apostolic Constitution, Pope Paul VI, before proceeding to his reform, buttresses Tradition:

It is a divinely revealed truth that sins bring punishments inflicted by God's sanctity and justice. These must be expiated either on this earth through the sorrows, miseries and calamities of this life and above all through death, or else in the life beyond through fire and torments or "purifying" punishments. Therefore it has always been the conviction of the faithful that the paths of evil are fraught with many stumbling blocks and bring adversities, bitterness and harm to those who follow them.

These punishments are imposed by the just and merciful judgment of God for the purification of souls, the defense of the sanctity of the moral order and the restoration of the glory of God to its full majesty. Every sin in fact causes a perturbation in the universal order established by God in His ineffable wisdom and infinite charity, and the destruction of immense values with respect to the sinner himself and to the human community. Christians throughout history have always regarded sin not only as a transgression of divine law but also—though not always in a direct and evident way—as contempt for or disregard of the friendship between God and man, just as they have regarded it as a real and unfathomable offense against God and indeed an ungrateful rejection of the love of God shown us through Jesus Christ, who called his disciples friends and not servants... (par 2)

...That punishment or the vestiges of sin may remain to be expiated or cleansed and that they in fact frequently do even after the remission of guilt is clearly demonstrated by the doctrine on purgatory. In purgatory, in fact, the souls of those "who died in the charity of God and truly repentant, but before satisfying with worthy fruits of penance for sins committed and for omissions are cleansed after death with purgatorial punishments. This is also clearly evidenced in the liturgical prayers with which the Christian community admitted to Holy Communion has addressed God since most ancient times: "that we, who are justly subjected to afflictions because of our sins, may be mercifully set free from them for the glory of thy name (par 3)