I've heard about it in passing, but I'm curious if historians have done any good work on it, yet? What it's causes were? What it's origins were? Putting it into a longer time frame, etc.?
The subject has been extensively treated, but for the most part not by historians.
As a result I feel there will prove to be a lot more to be said about the deeper roots of the panic, but its proximate cause was the spread of a series of highly imprecise written "indicators" that purported to reveal the likelihood that satanic ritual abuse (SRA) had occurred. These indicators were composed by a fundamentalist Christian social worker named Catherine Gould, and were widely distributed among both government and private child help groups in both the US and the UK, often via conferences at which proponents of the existence of SRA spoke. The result was the creation of an informal but influential network of dubious therapists and their supporters, all convinced of the existence of a real and widespread network of satanic covens, urging that police and other authorities "believe the children".
To give you an idea of how easy it was to "diagnose" the presence of SRA by using these indicators, one of the signs social workers were told to watch out for was young children who were "scared of ghosts".
A key second factor was the manner in which children suspected of being involved in an SRA case were questioned – there were numerous cases of social workers refusing to believe denials that anything sinister had taken place, of promising rewards such as "rides in helicopters" to those who gave them the information they wanted, and threatening punishment to those who did not. These are, it need hardly be said, precisely the sorts of conditions in which false testimony is given and indeed false memories can take root.
The allegations also tied into an older set of stories about similar cases of assault - most famously the book Michelle Remembers, by Michelle Smith (1980), which detailed the abuse Smith alleged she experienced at the hands of members of a Satanic cult (including her own mother) during the mid-1950s in British Columbia. But parallels can be traced back to cases of alleged multiple non-satanic child abuse that received extensive publicity in the mid-1980s, and, further, to the 19th century, and tales that circulated in protestant churches in North America of the satanic abuse of girls admitted as nuns by Catholic convents.
The panic began in the late 1980s and ran until well in the 1990s. Among academic resources on the subject I would recommend looking at Jean LaFontaine's report to the British government. LaFontaine was an anthropologist and as part of her remit she conducted an in depth study, using government and police records, of several dozen SRA cases in the UK.
Among other sources,Mark Pendergrast's Victims of Memory stands out for me. Pendergrast was an investigative journalist whose daughter accused him of abusing her, and his book combines a history of the "recovered memory" scandal with personal reflections on the impact such allegations had on families.
I covered the SRA epidemic extensively as it unfolded as a writer for Fortean Times and have retained an interest in the subject. An article I wrote on a little-known SRA case that took place in Pembroke, Wales, discusses an excellent example of both the ludicrousness of many of the allegations, and the hideous impact they had when believed.