Hippies in the U.S. were always a small segment of the population who got a lot of media coverage.
Many of them grew up, sold out, and joined the system they claimed to reject or oppose, and many of them just had some fun times with the hippie lifestyle and then got on with their lives. Source
The 'morals' of the hippie movement still remain, like relaxed attitudes toward drug use, promiscuity, vaguely New Age spiritual inclinations, rejecting social convention on general principle, and distrust for 'the establishment'.
It's also important to remember that the hippie scene injured a lot of people, and people were glad when the whole thing was over.
People liked the free love, but sexually transmitted diseases tore through the population, and many children were born out of wedlock to mothers more interested in the hippie lifestyle than building a family for their children.
Drugs claimed victim after victim, leaving many young people permanently injured or dead. Source
With increased drug use came increased crime and violence.
Many Americans despised the hippies for a variety of reasons, like...
Hippies' association with the Charles Manson murders. One of the Manson Family, a woman called Squeaky Fromme, attempted to assassinate President Gerald Ford. Source
Hippies' prominent role in protesting the Vietnam War, including their role in the disgusting abuse heaped on many returning soldiers. The hippies, because of the way they dressed, were very visible even though they were not the majority of the people doing this.
Greene reprinted 81 letters detailing Vietnam veterans being spat upon in the first section of Homecoming. The persons described as assailing the veterans came from a wide spectrum of American society. Assailants of the veterans are variously described as "a woman about forty", "middle-aged lady", "youngster", "college types", "group of people", "sweet little old lady", "well groomed little old lady", "rude couple", and "teenagers"—as well as "hippies" and "flower children". The veterans assaulted were not just ordinary soldiers; they ran the gamut of military occupations, including such noncombatants as a surgeon, a dentist, a West Point cadet, and a Catholic priest. In one case, a passerby remarked that a soldier who had been killed in action deserved to die. Reported locales did not just include airports, but bus stations and ordinary street settings; in one case, the spitting occurred in New Zealand. In several cases, the spat-upon veteran related minor retaliation upon his assailant, although most vets avoided such.[9] [Source]4 This kind of abuse still continues today though thankfully much reduced, and it has happened to contemporary veterans I personally know.
Many Americans viewed this as an utter betrayal by a bunch of drugged out losers.
These negative effects of the hippie movement are a contributing factor to the majority of the American population ignoring it and turning away from it once many hippies got older.
This article provides a very good overview of what the hippies were about and what happened to them.
Here is another interesting article about where the hippie movement may have come from.
Meanwhile, in the early months of 1965, an astounding number of musicians, singers and songwriters suddenly moved to a geographically and socially isolated community known as Laurel Canyon in Los Angeles. Within months, the “hippie/flower child” movement started in Laurel Canyon and began to protest the Vietnam War.3 This article will show that this so-called peace movement was likely controlled by the same military/intelligence community that instigated the Vietnam War.
Link to the article
EDIT:
Regarding secularization:
The hippie movement in the United States was not a secularizing movement. It included and promoted many alternative spiritualities to mainstream American Protestant Christianity and Catholicism. These alternative spiritualities included Hinduism, New Age, Gaia, Hare Krishna, Astrology, Bhuddism, many cults like Jim Jones and the People's Temple, and even hippie Jesus movements.
The 1960s counterculture also contained a decidedly spiritual dimension that attracted a great deal of hippie interest. The movement incorporated meditation, the occult, Native American spirituality and Eastern forms of religion such as Zen Buddhism and the International Society for Krishna Consciousness (“the Hare Krishnas”). Source
The secularizing influences in the United States came from the education system, the legal system, and the media, not the hippie movement.
Americans are generally more individualistic than Europeans, so the social forces which discouraged religious participation in Europe were accepted or rejected by millions of individual Americans. The United States is also a very large country geographically, so many regions remained spiritually engaged and community social dynamics worked toward maintaining religious participation.
The United States also experienced periodic spiritual awakenings and revivals throughout its history, and this is part of the cultural fabric of the nation. Source
The Great Awakening, 1734-43. In December 1734, the first revival of historic significance broke out in Northampton, Massachusetts.
The Second Great Awakening, 1800-1840. By 1850 the nation's population exploded fourfold to 23,000,000 people, but those connected to evangelical churches grew nearly tenfold from 7% to 13% of the population--from 350,000 to 3,000,000 church members!
The Businessmen's Revival of 1857-1858. Revivals broke out everywhere in 1857, spreading throughout the United States and world. Sometimes called The Great Prayer Meeting Revival, an estimated 1,000,000 people were added to America's church rolls, and as many as 1,000,000 of the 4,000,000 existing church members also converted.
The Civil War Revival, 1861-1865. At the start of the Civil War in 1861, it seemed as though the soldiers for both sides had left their Christianity at home and gone morally berserk. By 1862, the tide turned, first among the Confederate forces. An estimated 300,000 soldiers were converted, evenly divided between the Southern and Northern Armies.
The Urban Revivals, 1875-1885. In 1875, Moody returned home and began revivals in America's biggest cities. Hundreds of thousands were converted and millions were inspired by the greatest soul winner of his generation.
The Revivals of 1905-1906. Billy Sunday, who became a key figure about this time, preached to more than 100,000,000 people with an estimated 1,000,000 or more conversions.
The Azusa Street Revival, 1906. The resulting Pentecostal Movement and the later Charismatic Movement, which both exploded worldwide in the twentieth century both trace their roots to this revival.
The Post-World War II Awakening. After World War II, in 1947 and 1948, Pentecostals experienced two strands of an awakening, one the Latter Rain Revival and the other the Healing Revival. An estimated 180,000,000 people attended Billy Graham's nearly 400 crusades, and millions more viewed on television.
The Charismatic Renewal and Jesus Movement. During the late 1960s and early 1970s more revivals of national scope developed. The first strand was the Charismatic Renewal which spread far beyond Pentecostal and Holiness churches to college campuses, the Catholic Church, and mainline denominations.34 The second strand, the widely publicized Jesus Movement, emphasized turning from drugs, sex, and radical politics to taking the Bible at face value and finding Jesus Christ as personal Savior.
The Mid-1990s Revivals. Despite the widespread secularization of society since the Cultural Revolution that began in the late 1960s, in the mid-1990s God once again brought a series of revivals, mostly to Charismatic and Pentecostal groups.
As you can see, the United States has experienced major religious revivals periodically, almost in every generation. These revivals have refreshed the religious participation of Americans, and the devastation of WW1 and WW2 did not fall upon the United States the way it fell on Europe. Therefore, Americans' religious faith didn't suffer from experiencing the horrors of WW1 and WW2, as did the faith of many Europeans.
The difference between American religious participation and European religious participation has nothing to do with hippies.