With regards to Western scholars interpreting the Qur'an, we need to break this down a bit. What do I mean by a Western scholar? I'm not talking about the person's national or cultural background. I mean a scholar who works within the disciplines and methodologies of Western scholarly methods, as opposed to Islamic methodology.
This could come in three categories:
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Muslim scholars who use Western methodology
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Non-Muslim scholars who are interested in Islamic studies out of intellectual curiosity
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Non-Muslim scholars who are interested in Islamic studies for the purposes of opposing and casting doubt on Islam and levelling allegations against it.
As for the first category, there are not that many and I don't know the exact rulings on it, but I have seen it done in one case using literary criticism and it was not correct as the context of the situation in which the verses were revealed was ignored.
As for the second category, they are usually not focused on interpreting the Qur'an. You have to think about why somebody would want to give an interpretation of the Qur'an, what is the aim? For Muslims, they want to gain spiritual benefit by understanding what Allah has revealed; to thereby increase their faith and know what is required of them in terms of beliefs and actions. For someone who is just interested in Islam without believing in it, they are more likely to focus on other subjects like Islamic history. If they do comment on the Qur'an, it is more likely to be in terms of drawing attention to certain linguistic aspects.
For the third category, clearly I don't support this. Not only is this a malicious aim, but the approach used is very flawed and full of errors and misconceptions, sometimes wilful misinterpretation. For example, there was an Islamicist named Patricia Crone who had a revisionist approach to Islamic history; she cast doubt on Islamic texts recording the sayings and actions of the Prophet (peace and blessings of Allah be upon him) and called the history of Islam as recounted by Muslims into question. One of the ways she did this was to allege that the early Muslim community arose in another part of Arabia than Makkah.
Now not only was this self-contradictory given that she also stated that the Prophet publicly recited the Qur'an to his followers, and that Makkah is mentioned in the Qur'an, but she also used misinterpretation of the Qur'an to put forward her argument.
For example, she tried to allege that the Muslims' opponents in Arabia were monotheists, situating them thereby in the north of Arabia rather than in the Hijaz (the area of Makkah and Madina) where people were polytheistic. She argued that since these opponents recognised Allah as the Lord and Creator, they were essentially monotheists and thus she reduced the dispute between them and the believers to a disagreement over the role of the angels.
However, since Crone was a historian, not a theologian, she doesn't realise that monotheism means more than recognising Allah as the Lord. It also means that you have to reject worship of all other deities and declare that only Allah is worthy of worship. So she ignored all of the verses that mention how the polytheists of Makkah used to call on the jinn for protection, and that mention some of the polytheistic deities by name, and that mention what the polytheists used to say about their gods.
That's just one example; I could give many. But clearly this kind of thing is inadmissible.
Now, does that mean that Western scholars are to be completely dismissed and rejected, and that they have no role in Islamic studies? No, I don't think it does, and in sha Allah I will get back to you with some of the positive contributions made by some Western scholars later on as I have now run out of time.