I do not know where you've got your version from (especially that it was lost between 0AD and the 20th century, when it actually had been the 19th and 20th and Damascus steel didn't exist before the 6th century), but I know about this one:
Many people in Europe saw these steels and tried to recreate the effect through processing. However, they could not discover the secret, and could not make it. Though there was a demand for Damascus steel, in the 19th century it stopped being made. This steel had been produced for 11 centuries, and in just about a generation, the means of its manufacture was entirely lost. The reason it disappeared remained a mystery until just a few years ago.
As it turns out, the technique was not lost, it just stopped working. The "secret" that produced such high quality weapons was not in the technique of the swordsmiths, but rather on the composition of the material they were using. The swordsmiths got their steel ingots from India. In the 19th Century, the mining region where those ingots came from changed.
So it was never really lost. As far as we know it simply wasn't produced in 1 particular region (Europe) for a relatively short amount of time (1 century).
And, like I said before, it did not offer any significant structural advantages for its labor inefficiency. So "Damascus steel" is just 1 minor technique of producing a specific steel alloy, with many substitutes that had been used in its place.
It's not like human civilization suddenly lost the technology of steel production and forging.
Lost tech is a meme. I could say the modern humanity lost the tech of making horse armor, but it is just inaccurate semantics. We can still make metal and we can still make armor in the shape of a horse, we just don't, because there's no demand for it.
The actual paper about the impurities: https://www.tms.org/pubs/journals/JOM/9809/Verhoeven-9809.ht...