Why has the word 'margarine' dropped out of fashion?
Solution 1:
Part of the answer is in your question: Those of us who had older relatives who were scarred by the stigma of being too poor to afford butter, were taught that margarine was "low class".
The main reason was touched on by Hot Licks' comment: Advertisers have turned food into fashion. As it's not a "handbag", it's a "Coach" bag; those aren't "sneakers", they're "New Balance cross-training shoes", "margarine" is too generic a word for the myriad, proprietary concoctions (with fancy names) that protect people from admitting that someone in their family was poor at one time, and managed to develop (and pass on) a taste for the stuff.
Solution 2:
At least in the United States, margarine actually is considered to have a terrible health profile (full of carcinogenic trans fats), and no company that wanted to sell any of its spread at all would refer to it as margarine.
Solution 3:
Margarine, by its official definition, has to contain at least 80% fat, according to Flora:
Margarine must have a fat content of 80% or more (similar to butter). So spreads are similar to margarines, but with less fat. This is why Flora is called a spread – it contains less fat than margarine.
So the simple answer is probably that most spreads nowadays are too “healthy” (or at least don’t contain enough fat) to fall under the definition of “margarine”.
I have a tub of “Tesco British Spreadable” that contains 11% fat and 15% saturates, falling woefully short of the standard for margarine. Evidently companies are still struggling to come up with an actual noun to describe it, falling back on adjectives instead.
Solution 4:
I think that producers have been trying to find more appealing names that could be associated with a product ( margarine) that was no longer what it used to be, especially from the point of view of healthfulness:
In the mid-1960s, the introduction of two lower-fat blends of butter oil and vegetable oils in Scandinavia, called Lätt & Lagom and Bregott, clouded the issue of what should be called "margarine" and began the debate that led to the introduction of the term "spread".
In 1978, an 80% fat product called krona, made by churning a blend of dairy cream and vegetable oils, was introduced in Europe and, in 1982, a blend of cream and vegetable oils called clover was introduced in the UK by the Milk Marketing Board. The vegetable oil and cream spread I Can't Believe It's Not Butter! was introduced into the United States in 1981 and in the United Kingdom and Canada in 1991.
In recent decades, margarine spreads have gone through many developments in efforts to improve their healthfulness. Most brands have phased out the use of hydrogenated oils, and are now also trans fat free. Many brands have launched refrigerator-stable margarine spreads that contain only 1/3 of the fat and calorie content of traditional spreads. Other varieties of spreads include those with added Omega-3 fatty acids, those with low or no salt, those with added plant sterols, claimed to reduce blood cholesterol, and some made from olive oil or certified vegan oils. ( Wikipedia)