Whether you think it really happened doesn't matter, I'm just clarifying interpreting the story.

Fixed that for you. Actually, the "knowledge of good and evil" phrase that's used could have meant meant "knowledge of everything," with "good and evil" (specifically with the words used) being a connotative phrase sometimes meaning "everything." Doesn't really matter, though, as you're just interpreting the story as you want to.

The suggestion was that eating from the tree, whether for all knowledge or simply more knowledge (/moral knowledge) would make them more like gods. Shielding them from being aware of reality isn't some loving act, especially if you created that reality yourself.

They weren't being selfish, after all, they were just being human. Some asshole comes along and says "Hey I'm your creator, this is paradise. Do whatever you want but do not touch that fucking tree of knowledge or else." Then, like awesome, curious humans, they rebel against a command given without a reason and explore what's in front of them. Doing so makes them aware (they gained knowledge here, this wasn't some terrible thing) and God in his omnipotence punishes them for it. I mention his omnipotence, because if he's truly omnipotent and even a little loving, he could have A) forgiven them and let them continue to live in paradise, B) not put the fucking tree there in the first place, since C) he created them and since he's supposedly all-knowing not only knew that they would eat from the tree all along but in fact created them to be likely to do so.

I should be fair, though, and mention that when the story was created, Yahweh was probably considered to just be one of many gods, which is why the story matches up so poorly to the concept of an omnipotent, omniscient being (especially a benevolent one).