Actually, Schaff outlines the demise as having to do with the excesses of the Montanists. After recounting the views of some early chialists, Schaff states:
Tertullian was an enthusiastic Chiliast, and pointed not only to the Apocalypse, but also to the predictions of the Montanist prophets. But the Montanists substituted Pepuza in Phrygia for Jerusalem, as the centre of Christ’s reign, and ran into fanatical excesses, which brought chiliasm into discredit, and resulted in its condemnation by several synods in Asia Minor.Just as the ancient Montanists discredited premillennialism with their excesses, the modern dispensational premillennialists have introduced their own excesses, e.g., the radical distinction between Israel and the Church, which was unknown among ancient chiliasts. For example, Schaff says about Justin Martyr:
Justin Martyr represents the transition from the Jewish Christian to the Gentile Christian chiliasm. He speaks repeatedly of the second parousia of Christ in the clouds of heaven, surrounded by the holy angels. It will be preceded by the near manifestation of the man of sin (a[nqrwpo" th'" ajnomiva") who speaks blasphemies against the most high God, and will rule three and a half years. He is preceded by heresies and false prophets. Christ will then raise the patriarchs, prophets, and pious Jews, establish the millennium, restore Jerusalem, and reign there in the midst of his saints; after which the second and general resurrection and judgment of the world will take place. He regarded this expectation of the earthly perfection of Christ’s kingdom as the key-stone of pure doctrine, but adds that many pure and devout Christians of his day did not share this opinion. After the millennium the world will be annihilated, or transformed. In his two Apologies, Justin teaches the usual view of the general resurrection and judgment, and makes no mention of the millennium, but does not exclude it. The other Greek Apologists are silent on the subject, and cannot be quoted either for or against chiliasm.Unlike modern dispensationalists, Justin was decidedly non-Jewish in his views on the future millennium.
Another interesting description by Schaff was of Papias:
Papias of Hierapolis, a pious but credulous contemporary of Polycarp, entertained quaint and extravagant notions of the happiness of the millennial reign, for which he appealed to apostolic tradition. He put into the mouth of Christ himself a highly figurative description of the more than tropical fertility of that period, which is preserved and approved by Irenaeus, but sounds very apocryphal.Interesting set of chiliasts indeed.
Schaff also briefly discusses the Jewish chiliast, who sound more like modern dispensationalists than garden variety premils.
The Jewish chiliasm rested on a carnal misapprehension of the Messianic kingdom, a literal interpretation of prophetic figures, and an overestimate of the importance of the Jewish people and the holy city as the centre of that kingdom. It was developed shortly before and after Christ in the apocalyptic literature, as the Book of Enoch, the Apocalypse of Baruch, 4th Esdras, the Testaments of the Twelve Patriarchs, and the Sibylline Books. It was adopted by the heretical sect of the Ebionites, and the Gnostic Cerinthus.
So, there are early Christians who viewed the millennium as a happy time, and there are others who went overboard.
And this matters because????