The short answer: moral panic, not science.
By the 1890s, absinthe was the most popular spirit in France. It was drunk by artists, writers, workers, and aristocrats alike. Vincent van Gogh drank it. Oscar Wilde drank it. Henri de Toulouse-Lautrec drank it. The hour between five and seven in the evening was called l'heure verte — the green hour — and cafés across Paris served it to everyone.
The wine industry, devastated by the phylloxera epidemic that had destroyed French vineyards in the 1860s–1880s, had recovered by the 1890s and found a powerful competitor in cheap absinthe. Wine producers, temperance campaigners, and conservative social reformers formed an alliance and targeted absinthe specifically — not alcohol generally. They claimed that the wormwood compound thujone caused hallucinations, madness, and violence. The term "absinthism" was coined to describe a supposedly distinct form of alcohol-induced psychosis caused only by absinthe.
The decisive moment came in August 1905 in Commugny, Switzerland, when a farmworker named Jean Lanfray murdered his wife and daughters. Lanfray had drunk two glasses of absinthe that day — but also significant quantities of wine, brandy, and crème de menthe. The press focused entirely on the absinthe. A petition of 82,000 signatures demanded a ban. Switzerland banned absinthe in 1908. France banned it in 1915. The United States banned it in 1912. The ban was total and it lasted nearly 100 years.
What science actually found
Modern toxicological research has established that thujone — the compound blamed for "absinthism" — is present in historically produced absinthe at levels far too low to cause psychoactive effects. The hallucinations and madness attributed to absinthe were caused by alcohol itself, and in some cases by adulterants (copper sulphate, antimony, cheap industrial spirits) used in low-quality industrial absinthe. Pre-ban quality absinthe contained approximately 5–15 mg/kg thujone. You would die of alcohol poisoning before consuming enough absinthe to ingest a toxic dose of thujone.