Frank Manuel shows that Euhemerism remains a very live option as an explanation of the origins of religions into the eighteenth century (The Eighteenth Century Confronts the Gods, ch. III). Isaac Newton took a primarily Euhemerist approach in his Chronology, and Isaac Newton was no idiot.
Euhemerism hasn’t disappeared, but it’s not nearly as popular as it once was. Euhemerism’s decline is tied in part to the decline of biblical authority. In Newton and others, Euhemerism was a tool for grafting extra-biblical information into biblical history.
It’s been displaced by psychological (Hobbes and to some degree Vico, Freud, Jung) or social (Durkheim) or psycho-social (Girard) theories of the origins of religion. I wonder if there’s a gain: Do we understand the religion better now that we’ve psychologized and socialized it? Does that make better sense of the data we have than the Euhemerist idea that the gods are deified heroes and heroines?
Psycho-social theories of religion were posed in direct opposition to theological accounts. One of the accompaniments, or perhaps prerequisites, for psycho-social theories is the idea of religion as a general and universal category. That levels out the orthodox Christian claim that there is such a thing as false religion/idolatry, and it smooths out the doctrinal and practical differences between religions.