I don't think religious fundamentalists hold the power to "cancel Halloween" period. But kids in many schools, Minneapolis schools for example, are not allowed to wear costumes -- not even non-scary ones -- to class on Halloween because of people with religious objections.
Of course they don't, but some of them make a fuss; it seems to me it's similar to the fuss made about "the War on Christmas," just coming from a different place.

I know! And think about it -- we're talking about someone who also was an academic and a journalist in the 1970s. Back in them days I didn't even know there were such a thing as religious fundamentalists outside of Southern things like tent revivals or snake handling or speaking in tongues. But in Minnesota, in that era, on a college campus? I doubt she was anything more extreme than a devout Lutheran or Catholic.
Yeah, I once worked with a devout Catholic who objected to Halloween.
I believe this to be the result of one of those compromises between pagans' holiday to honor the dead (Samhain) and Christians' preference for giving things a Christian overlay. Like the way Christmas shares symbolism with winter solstice and Easter with spring solstice. They're related to seasons and to planting and harvest cycles. Those early European Christians were good at finding those kinds of compromises. At least, back in them days, some of the time ... 
Yes. But, at the risk of sounding prejudiced against Roman Catholics (OK, I admit I am sort of prejudiced against the Roman clergy), in later days the Catholic Church was particularly good at that kind of syncretism; they felt they could win more converts if they allowed the natives to adapt some of their pagan customs to Catholic Christianity. I mention this because I think it's particularly applicable to
Dia de los Muertos. I seem to recall reading somewhere that customs associated with this holiday go back to pre-Christian Mexico.
As a matter of fact, this sort of syncretism even appears in Margaret Coel's "Wind River Mysteries" novels, which take place in the present day on the Arapaho Reservation in Wyoming. Some of the stories feature one of the main characters, Father John O'Malley, a Jesuit, allowing Arapaho customs to be used in addition to the Roman Catholic Mass as part of funeral ceremonies.
At least in North America, anyway, I think Protestants were far less tolerant of this combination of native and Christian customs. For example, I'm thinking of the Puritan clergyman the Rev. John Eliot, who was a missionary to the natives in Massachusetts, who required his converts to give up all of their native customs.
Not braggin' on the Protestants here, just sayin.'