I think one has to seperate the steel alloy, which covered, and the forging techniques used. The former ran out, at which point steel quality decreased. Lets call that steel from Damascus.
And there is what is now commonly called Damast steel, basically folded and twisted steel of dofferent properties. That technique is as old as blacksmithing because it was, more or less, the only way to get rid of impurities. The Japanese developed this technique to the extreme by not just getting rid of impurities but by gettind specific steel properties to defined parts of a blade.
European sword smiths stopped doing that, first European steel became better and more homogenous and didn't require anywhere near as much imourity removal. Secondly, spring steel is pretty sturdy monosteel, so need need to get specific steel in specific parts of a blade. And lastky, European bladed weapons from the Napoleonic era onwards were industrially mass produced (as compared to the manufacture mass production from earlier periods). And mass production means cost reductions, that didn't start with MBAs. Sonce those weapons were good enough to kill people by stabbing, cutting and slashing them Damast steel wasn't needed. The obvious exception are expensive master pieces forged individually. And the better quality "industrial" ones.
Damast steel has renessaonce at the moment, mainly because it looks great. And it is a way for knife makers to upsell, otherwise not a singpe one of them could compete on price.
The Japanese way of blade making has the benefit of having properties of the alloy at, e.g., the blade (hard and sharp) and the core and back of a blade (softer and stronger). Damast steels properties are all over the place, meaning it has no real value, IMHO, regarding a blades capabilities when it c;mes to cutting. Those blades so, as the Japanese ones, are falling into the region of art so, and there the optical properties matter a lot. And there Damast is just beautiful.
From experience so, Damast steel bars are hard to get rigjt, I'll go out on a limb and say Japanese bar steel is easier (if you forgo the tradidional Tamahagane way that is). Finishing the blade is easier woth Damast so, a proper Japanese blade requires so much delicate heat treatment and polishing to get right, it is borderline rediculous.