Personally I don't think there were a surge in popularity in the 20th century. Wallpaper has been around since the Renaissance as an alternative to tapestry and a good number of homes have them as they are the cheapest way to decorate a house. According to books such as Inside the Victorian Home: A Portrait of Domestic Life in Victorian England or This Fabulous Century, middle and upper class Victorians generally pile their homes with clutters of brick-o-brack and their walls often look equally cluttered. Wallpapers are more iconic in the 50's-70's because instead of the understated floral pattern on wallpaper of the past, artists such as Andy Warhol designed a lot of very bright and funky looking wallpapers. Here's an example. Wallpaper went out of style because modern interior designers often want a clean and sleek look so plain monotone walls overtook wallpaper in popularity.