That piece of culture was extremely short lived, maybe just the late eighties and the early nineties.
Already in the mid to late nineties people started mocking this culture, eg the MFX Transgression intros which were just 3d polygon renderers but with some uglifying post processing and then they claimed it was super impressive real-time raytracing (which, for no context, was basically impossible to do full screen on computers of the days).
Some stuck up kids blamed them for cheating but generally everybody laughed at the prank. The demoscene has been open, friendly and collaborative much much longer than it was properly competitive. It's really a minor origin detail, not a key part of culture and ethos.
People do still like to make fun of it, i.e. pretend is still current. Eg common proclamations such as "Kewlers suck", or demos like "Regus Ademordna" which IMO is a particularly splendid example and worth checking out.