Was he and his theories like Permanent Revolution still viewed with open hostility? With Stalim out of the picture, why was Trotsky not recuperated in the former USSR?
Lev Trotsky lived in internal exile from 1928, and external exile from 1929. From the moment he was ousted from the Communist Party in 1927, Trotsky was a steadfast critic of what he referred to as the Thermidorian Reaction of the Soviet Union-- which is a reference to the events during the French Revolution of the same name (1794) whereby Maximilien Robespierre was denounced as a tyrant and beheaded the next day by a determined clique within the National Assembly. These events paved the way for the 18 Brumiere Coup d'État that followed whereby Napoleon came to power as First Consul and ultimately Emperor.
Essentially, Trotsky was constantly, not-so-subtly trying to liken himself to Robespierre, the Thermidorians to the troika (triumvirate) formed by Iosef Stalin, Lev Kamenev, and Grigori Zinoviev to oust him from power, and then ultimately Stalin to Napoleon-- the man who derailed the righteous revolution.
He did this in numerous writings, sometimes more harshly than others. As such, the short answer to your question is that Trotsky and his theories were always viewed as a bastardization of quote-unquote true Marxism-Leninism. As I stated earlier as well, though he began as a critic of the Stalin-led troika, he quickly grew into an out-and-out critic of the Soviet Union. Thus, Trotsky was viewed-- not just by Stalin, but indeed, the entire ruling class of the Soviet Union-- as a traitor to and enemy of the revolution. The real irony here is that Trotsky advocated for many of the same atrocities and injustices perpetrated by the Soviet Union under Stalin (such as the invasion of Finland, the collectivization of Soviet agriculture by force, the violent purging of class enemies from the ranks of the Communists, among others), he really just thought he would go about it more effectively. Consider the following excerpts from Trotsky's own writings.
From On the Situation in Russia (1928):
"We thus come to the conclusion that a “victory” of the Right [Stalin's clique] would lead directly along the Thermidorian-Bonapartist road, a “victory” of the Centrists [Trotsky's nomenclature for the majority of ruling class] would lead zig-zag along the same road. Is there any real difference? In the final historic consequence there is no difference. Centrism presents only a variety of conciliation (in the given case, with the new proprietors, with the bourgeois society, which is attempting to form itself anew) but this only as the final historic consequence. At the present stage, however, Centrism reflects on a much larger scale the broad strata of the “superior” workers." (emphasis mine, text of the essay)
From Stalinism and Bolshevism (1933):
"The Bolsheviks... did not have to wait for the Moscow trials to explain the reasons for the disintegration of the governing party of the USSR. Long ago they foresaw and spoke of the theoretical possibility of this development. Let us remember the prognosis of the Bolsheviks, not only on the eve of the October Revolution but years before. The specific alignment of forces in the national and international field can enable the proletariat to seize power first in a backward country such as Russia. But the same alignment of forces proves beforehand that without a more or less rapid victory of the proletariat in the advanced countries the worker’s government in Russia will not survive.
Left to itself the Soviet regime must either fall or degenerate [Critique of Stalin's Socialism in One Country concept, which was far more popular than Trotsky's own concept of Permanent Revolution]. More exactly; it will first degenerate and then fall. I myself have written about this more than once, beginning in 1905. In my History of the Russian Revolution... are collected all the statements on the question made by the Bolshevik leaders from 1917 until 1923. They all amount to the following: without a revolution in the West, Bolshevism will be liquidated either by internal counter-revolution or by external intervention, or by a combination of both. Lenin stressed again and again that the bureaucratisation of the Soviet regime was not a technical question, but the potential beginning of the degeneration of the worker’s state." (emphasis mine, text of the essay)
From Letter to the Workers of the USSR (1940):
"Greetings to the Soviet workers, collective farmers, soldiers of the Red Army and sailors of the Red Navy! Greetings from distant Mexico where I found refuge after the Stalinist clique had exiled me to Turkey and after the bourgeoisie had hounded me from country to country!
Dear Comrades! The lying Stalinist press has been maliciously deceiving you for a long time on all questions [Pravda was edited at this time by Pyotr Pospelov, a strong supporter of Khrushchev], including those which relate to myself and my political co-thinkers. You possess no workers’ press; you read only the press of the bureaucracy, which lies systematically so as to keep you in darkness and thus render secure the rule of a privileged parasitic caste.
Those who dare raise their voices against the universally hated bureaucracy are called “Trotskyists,” agents of a foreign power; branded as spies-yesterday it was spies of Germany, today it is spies of England and France-and then sent to face the firing squad. Tens of thousands of revolutionary fighters have fallen before the muzzles of GPU Mausers in the USSR and in countries abroad, especially in Spain. All of them were depicted as agents of Fascism. Do not believe this abominable slander! Their crime consisted of defending workers and peasants against the brutality and rapacity of the bureaucracy." (emphasis mine, text of the essay)
So here you have three curated excerpts from Trotsky's own writing where he does the following:
I specifically chose these three pieces (none of which marxists.org tags with their significant work flair) because they really neatly show, with one example from each decade, just how Trotsky's own commentary regarding the USSR evolved, or rather, did not evolve. Already in 1928, he was demonstrating abject megalomania and delusions of persecution; Trotsky was hardly the only Bolshevik persecuted by the same group he helped put into power (both Zinoviev and Kamenev of the aforementioned troika would be executed by Stalin within a decade of Trotsky's expulsion as well).
By the 1930s, Trotsky's conception of the USSR had changed to demonstrate that he had moved past his own personal persecution (supposedly) and now rejected the current incarnation of the Soviet Union as a degradation of the Marxist state, and more importantly, a degradation which Lenin had predicted.
Finally, by the 1940s, he was essentially describing Stalin and USSR with the same rhetoric that Stalin and the USSR were using to describe Trotsky and his allies; Trotsky really ran the complete gambit, but as his writings in the 1920s show, the kernel for his denunciations of the Soviet Union grew from his own inability to succeed to Lenin's throne as he thought he deserved.
Suffice to say, writings like this-- and many, many others-- made Lev Trotsky an extremely unpopular figure in the USSR even after De-Stalinization allowed many of the other Old Bolsheviks who Stalin had liquidated to become more or less rehabilitated. By the time of his assassination at the hands of NKVD agent Ramon Mercader, Trotsky had renounced the USSR completely and was adament that the new path to real Communism was via himself and his so-called Forth International, whose first congress was attended by 21 delegates-- none of whom were Lev Trotsky-- and met in secrecy in the outskirts of Paris.
Also keep in mind that Trotsky was officially rehabilitated by then-newcomer Vladimir Putin's General Procurator's office in June of 2001.