It's odd, in a way, to have to explain Milton's significance: for about 250 years he was the undisputed heavy-weight champion of English literature. Everyone read him, memorised him, quoted and alluded him, and Paradise Lost was second in sales only to the Bible. Some of the relative neglect of Milton in the last half-century may have to do with style: poetry in general is less culturally central than it was (Byron today would play the electric guitar, I suspect), and long, epic poetry in particular is hardly written any more. (There's a certain irony in considering that Milton, who argued the merits of lyric poetry to his contemporaries, should have his epic -- unquestionably the finest example in English -- eclipsed by our preference for shorter verse.)
I'm not sure, though, that preferences in literary style can completely explain Milton's relative neglect -- his language is no more difficult than Shakespeare's, whose popularity only grew in the latter half of the twentieth century. I suspect that the larger part of our neglect of Milton is to do with his subject matter: Paradise Lost is ineradicably Christian -- the (Protestant) story of Sin, Creation, Fall and eventual Redemption, raised to the stature of heroic Myth. As Christianity has ebbs from its central cultural position, perceived artefacts of its hegemony also evaporate from public consciousness.
This is a pity, regardless of one's opinion of Christianity. First, Milton's poetic achievement is superlative. Images and metaphors and striking phrases follow carefully-crafted allusions and powerful, titanic characters. I liken reading Paradise Lost to watching a performer on a tight-rope -- you keep thinking ”this can‘t possibly go on -- surely he‘ll stumble“ -- as he manages ever more-impressive feats. The language is so heightened, and so sustained, that the poem is overwhelming, and offers a reading experience which is -- at least within English literature -- unique.
Secondly, even apart from his poetry, Milton ideas about society, politics, and human rights swirl at the confluence of a number of still-important streams of thought. He was a revolutionary, and an important part of the first modern experiment with republican government; he was an early defender of free speech and a free press; he suggests religious tolerance, and a degree of separation between Church and State; in his divorce tractates he edged his way towards sexual equality and companionate marriage. If we are to chart the trajectory of modern history it is essential that we study the roots of Western society. Reading Milton gives us a rare window into both the philosophical and imaginative landscapes of the 17th century.
Milton's politics exposed him to tremendous risk. At the Restoration of the monarchy a warrant was issued for his arrest, he went into hiding, and his books were ceremoniously burnt by the hangman. He was briefly imprisoned, and might have expected to be executed. It is believed that important friends (perhaps including Andrew Marvell) interceded on his behalf; there has been speculation that his blindness was made an excuse for leniency.
By the end of 1660 Milton was blind, impoverished (he was given a crushing fine), and living in virtual house-arrest in an unattractive house in Jewin Street. His activities were watched by the royal authorities. He was perforce denied any part in the intellectual and political arenas which had been the focus of his life. At that point, certainly his life's lowest ebb, he began composing Paradise Lost.