Pay no attention to the Old and New Testaments. As long as other means exist, indeed, just re-write the Bible. Stuffy ol´ stuff....
I can understand the Pope's logic. The argument would be that the Bible only used capital punishment because way back then that's how one normally removed the incorrigible from society. It opens the question of what the Bible would say to do if they'd had our easy method for life-long imprisonment. Basically, it's text vs. intent. I don't pretend to know more about Catholicism and the Bible than Pope Benedict, so I won't argue beyond that point.
But I do know the real world. Even if nobody ever escaped from prison, we have liberals pushing for letting people out, and there's always the chance for officials who believe the sob stories and forget the agony inflicted by the prisoner. Thus there remains the possibility that someone put in prison today with no parole could still be released 50 years down the road. So in reality there's no guarantee, thus the Catholic argument against capital punishment doesn't hold.