Having been there I need to address this. Yes the Satanic Panic was a real thing, it reached a lot further than role-playing games and it ruined the lives of innocent people. I was on both sides. I was a member of a fundamentalist church at the start. I held that infamous Chick tract in my hand. I was a churchless role-playing skeptic towards the end of the first wave. Yes, first wave. It has never really ended. Frankly the Satanic Panic was one of the factors in my total secularism today.
Entire books have been written on the matter. I do not feel I can better them. My focus is on the personal effect it had on role-playing games and gamers. In short mindless fear. The vast majority of people railing against RPGs had never cracked the cover of a book. (Sometimes I think any book, the Bible included.) The whole thing rode a wave of senseless emotion, and damaged or destroyed what ever it touched. The innocent were hurt, some even died, there were no guilty. Your classic witch hunt.
Anything that Motherās Against Everything did not like or understand was attacked; rock music, fashion, and yes role playing games. It comes down to magical thinking. If you believe some of the necessary elements of most religions, the idea of evil magic is possible. You see demons around every corner. My Dadās late second wife was one. The woman lived in constant fear. One of my players had to keep all his gaming materials in his car so his Grandmother didnāt destroy them. My Mother expressed dislike for the game, but I was no longer under her roof. She would blame a run of bad weather on D&D, or āthat gameā.
It was real, and I believe most gamers of an age were affected to some degree. People that didnāt or would not understand looking for a scapegoat for the world not being the shape they wanted it in. It could never be themselves that was the problem. If it was not you yourself, one of the people you played with. It was that prevalent. You kinda kept your head down outside Fannish circles.
So yes, TSR totally caved to the family frenzied crowd. Unlike the gamers, they could not duck. I was shocked when I saw D&D materials in Borders. Pleasantly shocked, it meant the family frenzied were losing the battle. (I bought my Oriental Adventures book at Borders.)
So yes, we have more or less won. Role-playing games are fairly mainstream. Being a gamer is not a black mark. However with the rise of the Christian Nationalists we cannot drop our guard. They want a theocracy that would make the Eighties look like a tupperware party (Ask your Mother).
RPGs are one of the goods included in the Price of Freedom, which is never free. Keep that in mind.