Ok, it's important to note that not everywhere in the world was affected by the events in D2. Our hero in D2 specifically followed the trail of the Dark Wanderer, and it is that trail across the geography of the world that was most affected by the Demons.
Additionally, we're dealing in a medieval setting where for the most part only merchants and some soldiers travel from city to city on a regular basis. Most communities are composed of people that never travel their entire lives. Unless the crisis specifically affected their town/village/city, it's doubtful they knew about what was happening elsewhere. There's no Cable Network in Westmarch detailing the fall of the Zakurum Church on the 6 O'Clock news each night :)
Now certainly, many thousands of people were affected. Those that died obviously aren't alive to remember the events. Those that do remember the events may or may not have had their own first hand accounts of them. They might remember that their neighbors in the next village were slaughtered, and the explanation was "demons" but unless they saw the slaughter with their own eyes, after 20 years with no other events to back up the claim they might have eventually convinced themselves it was really just jungle panthers or bandits, or a skirmish with a fellow city-state.
On top of that, 20 years is long enough for an entire generation without exposure to the events to have been born and grow up to adult hood. How many children nowadays remember the importance of 9/11 the way their parents do? In Sanctuary, five year olds at the time of those dark events are now 25, with hazy childhood memories, and younger siblings whom have never seen any evidence of Demons at all.
Really, the only people in all of Sanctuary whom have retained first hand accounts of Demons are those living in and around the Arreat Crater. The same place now also inhabited by deranged and violent ex-barbarians, and the one last tribe of Barbarians that are trying to keep the few demons that are still here from escaping the crater. Oh, and the Demon Hunters that hunt there as well.
So, there are some small groups that remember and have access to sources that confirm that Demons are real, but the major bulk of Sanctuary's population quite legitimately remains clueless. The evidence just isn't there. Bad things happened twenty years ago, but it's far easier to rationalize the fall of King Leoric and the Zakurum in human terms rather than demonic ones.
Threats of violence. We take these seriously and will alert the proper authorities.
Posts containing personal information about other players. This includes physical addresses, e-mail addresses, phone numbers, and inappropriate photos and/or videos.
Harassing or discriminatory language. This will not be tolerated.