Honestly, I don't remember this guy. There was a window of time where I didn't watch professional wrestling at all. I think I stopped around 2002ish, then started watching again in 2005ish (when I could first afford the miracle that is known as the DVR!).
I'd have to imagine that the Mordecai character was scrapped because of the religious implications that the character could imply. In a nut-shell, I think WWE creative realized that this character had the potential to piss off a lot of (religious) people. For instance: if the character became a heel in the eyes of the fans, that could make people upset. The use of religious icons and/or bible verses could piss people off; they could think that the WWE was "making light" of religion or whatever. What would happen if The Undertaker would be victorious over Mordecai? ...would that piss people off too? I mean, the idea of "evil" triumphing over "good" or "holiness" would definitely ruffle a few feathers.
The Undertaker could be brought up as an example of how the WWE was able to pull off such a character, without upsetting the religious community. The difference between a character like The Undertaker's and Mordecai is that The Undertaker wasn't overtly religious in any way...he was "evil personified" (ha!), and I think religious people would realize that it was just a "zombie"-type character that the good guys could overcome.
I don't think that the Undertaker's character is one that religious people would be as upset by. A religious person might take MAJOR offense to seeing a holy character beaten up, but not be so offended to see a "Demon" beaten up. The flip-side could also be taken into account though, the church might relish in seeing a "righteous" character beating up the bad guys. There's just too much at stake, politically (in my opinion).
I know terms like "Demon of Death Valley" were used for his character, but it's not like The Undertaker was coming out and tempting other wrestlers with apples...or something ludicrous like that...wait a minute..there was at least one instance in the late 90s I can remember where The Ministry "crucified" Stone Cold, and the Catholic Church went ballistic. Even though I'm sure these churches know that wrestling is "fake", they still don't like the idea of their religion being "mocked" (as they would see it). Wrestling isn't the only medium that religious people find offensive, they find problems with all TV, movies, music, etc.
All in all, I think that Mordecai was too big of a liability for the WWE to keep around. Much like Muhammad Hassan's character, it was just too big of a hassle to keep damage control for Mordecai.
I don't think I would have enjoyed Mordecai's character, even if I had been watching at the time. It seems to me that it was just cooked up to try to "shock" people, and I really don't see much happening with the character after a feud with The Undertaker (maybe Kane?). As I mentioned before, I just couldn't see a character like this lasting too long with the WWE. There's just too many people that could take the gimmick the wrong way.
All in all, it would be great if all these political beliefs didn't exist. I wish everyone could relax (and this goes for movies, tv, etc as well) and realize this is all just entertainment. A character like Mordecai's could have been very entertaining, but it's just not worth the risk of making so many people angry.