Depends on the country, but, generally speaking, it went from widespread to rare in one generation, and never was mandatory in the age of compulsory schooling.
Not sure what your point is - teaching of (non-classical) fiction in schools is itself very new, only a little more than a century old, and if you look at the mandatory fiction reading list in 1910s, 1930s, 1970s or 2010s, you'll see a lot of changes. So clearly teaching of literature in school doesn't stop Great Works from being reappraised.
From EY's Facebook page, there were two posts that got me thinking about fiction and how to work it better and make it stronger:
I was wondering if we could apply this process to older fiction, Great Literature that is historically praised, and excellent by its own time's standards, but which, if published by a modern author, would seem substandard or inappropriate in one way or another.
Given our community's propensity for challenging sacred cows, and the unique tool-set available to us, I am sure we could take some great works of the past and turn them into awesome works of the present.
Of course, it doesn't have to be a laboratory where we rewrite the whole damn things. Just proprely-grounded suggestions on how to improve this or that work would be great.
P.S. This post is itself a work in progress, and will update and improve as comments come. It's been a long time since I've last posted on LW, so advice is quite welcome. Our work is never over.
EDIT: Well, I like that this thread has turned out so lively, but I've got finals to prepare for and I can't afford to keep participating in the discussion to my satisfaction. I'll be back in July, and apologize in advance for being such a poor OP. That said, cheers!