Q:

Why was the end of Watchmen changed in the movie version? 

Given how the movie was hyped as being a faithful rendition (and, for the most part, it was), what was the reasoning behind making such a radical change to the ending?   
I've seen statements from Zack Snyder discussing why he felt the end was as good as the original, as well as claims that the original draft of the script he was presented already included the changed ending, but no explanation as to why that decision was made.  
Has there been an official explanation for the decision to change the ending so radically? 

A:

There are several reasons. 

Running Time - adding in the explanations of the psychic squid and Vaught's teleportation machine would have made the movie run much longer.   It was already at the maximum running length most people would sit through. 
Characters - The island and its inhabitants were able to be entirely cut from the movie by eliminating the psychic squid.   Adding them in would have increased the number of characters significantly and added more subplots. 
Visual effects - Text is easy to use in comics to explain what's happening.   But you can't show a psychic shock on the screen, you can't display the years of nightmares people were described as having afterwards.   Explosions, though, are pretty and very visible. 
Tales of the Black Freighter - This subplot, which confused several readers of the comic, was connected only to people on the island (and one child who played only a small part in the movie/comics), and could thus be eliminated by eliminating the psychic squid. 

So in the end, it all boils down to simplifying the story's moving parts and cutting the run time to something almost reasonable. 

A:

Director Zack Snyder explained it in terms of trying to keep the movie from running too long, as quoted in this article:

"The reason that the squid got taken out of the movie was so there’d be more Rorschach and a little bit more Manhattan.  Because we did the math, and we figured it took about 15 minutes to explain [the squid’s appearance] correctly; otherwise, it’s pretty crazy." 

A:

As far as I know there has never been an official explanation other than the ones stated in your question.   However, I would imagine that it was decided that the average movie-going public would not accept the ending in the book, i.e. a giant octopus-cthulhu-vagina-monster suddenly materializing in the middle of Manhattan would not be believable to the average audience member who has no interest in or knowledge of the original comics.   This is just speculation on my part, but I feel it makes sense. 