“Surely Jews and atheists were fine with this greeting just 25 years ago.”
Some were, some weren’t. It’s always been very touchy for some people. Christmas is NOT a Jewish holiday. Jews celebrate Chanukah, close in the calendar to Christmas but not a major Jewish holiday historically. Most American Jews grew up in a very Christian nation where Christmas dominates the early winter season. It’s a holiday of which they were not a part. Some chose to join in the festivities to the extent they could; others were and remain uncomfortable with Christmas. They do not see Jesus as their savior.
I have two close Jewish friends from whom I’ve received a Christmas gift every year, going back decades, even tho they are personally not part of it, nor want to be part of it, but respect my faith and its cultural traditions. They will wish me a Merry Christmas, but would not appreciate my returning that greeting. They usually spend the day helping out at soup kitchens, then go out for Chinese.
My Jewish friends’ tradition is to hit the movies on Christmas. No lines, all the big movies opening up. Then Chinese!