Well the religion has been practised for a while, although celebrating Jesus's birthday didn't actually happen until a few centuries after his death, Western Christians first celebrated Christmas on December 25 in 336, after Emperor Constantine had declared Christianity the empire's favoured religion. It was easier to convert everyone by changing the meaning of an already existing festival since December 25 already hosted two other related festivals: natalis solis invicti (the Roman "birth of the unconquered sun"), and the birthday of Mithras, the Iranian "Sun of Righteousness". By keeping celebrations on the same day of the year it was just easier for everyone, although many think Jesus was born much earlier in the year, around somewhere from March to May. Ever since this point, it's been celebrated although it wasn't very overly celebrated like it is today, it used to be done on a much smaller scale.
In other countries because there were different churches, such as the orthodox and such , some disagreed with this date and used to host Christmas on different dates but I think this practise isn't very widespread now.
It's famous because it holds great meaning to a over a billion people who follow Christianity and the majority of countries like the UK and the USA would have celebrated it's original message about 50 or so years ago. I think it's changed because as a whole, many societies are much more multicultural, we have Christians, Atheists, Muslims, Hindu's etc. The Christian aspect seems to have been played down nowadays and the importance placed on spending time with family, giving presents - a 'consumer' christmas as I've heard it from many people. This way the holiday is even celebrated by non-religious people.
I don't believe it will lose popularity, I think the Christian side of it is already becoming very unpopular as more and more people are becoming atheist or non-religious, especially as science pushes forward, but the consumer side will go on strong for a long time. If we lose Christmas, we would have nothing to celebrate and nothing to do.