What wiped the Buddhism traces from Kerala History?

1. Buddhism did not get wiped out because of lack of laity - In Sri Lanka and South East Asia millions of Laity are there.

2. Buddhism did not get wiped out because of Muslim invasion. Ashoka built a very storng Buddhist empire with Buddhist armies. Myanmar and Thailand all had ancient Buddhist armies and fought battles. Only monks are not permitted to fight. Lay believers can fight in wars.

Buddhism weakened because of Hinduism and the acceptance of Hinduism by rulers. Buddhist monks were persecuted and killed. Lay people had no one to guide them and soon fell into Hinduism.

Buddha considered Brahmanism to be a corrupted form of Dharma.

Buddhism was predominant in Kerala until it was swallowed by Brahminism. Many Buddhist idols were excavated from various parts of Kerala by Archaeological Survey. Here is one good article about the Buddhist traces in Kerala

There is no absolute consensus on this matter,

A few scholars have even contended that Buddhism never disappeared as such from India. On this view, Buddhism simply changed form, or was absorbed into Hindu practices.

   Buddha is even viewed as an avatar of the god Vishnu in Vaishnava Hinduism 
although buddha himself denied it..

But What is not disputed is the gradual decline of Buddhism in India, as the testimony of the Chinese traveler, Hsuan Tsang, amply demonstrates.Though Buddhism had already entered into something of a decline by the time of Hsuan Tsang’s visit to India during the reign of Harsha of Kanauj in the early seventh century, it has also been argued that its further demise, particularly in the early part of the second millennium AD, was hastened by the arrival of Islam.

Even Ambedkar, whose animosity towards Hinduism is palpable, was nonetheless firmly of the view that Islam dealt Buddhism a death blow. As he was to put it, “brahmanism beaten and battered by the Muslim invaders could look to the rulers for support and sustenance and get it. Buddhism beaten and battered by the Muslim invaders had no such hope. It was uncared for orphan and it withered in the cold blast of the native rulers and was consumed in the fire lit up by the conquerors.” Ambedkar was quite certain that this was “the greatest disaster that befell the religion of Buddha in India.”

So declination of Buddhism was due to Hinduism and Islamic Invasion.

A detailed study can be done at:

The decline of Buddhism in India around the 12th century http://en.wikipedia.org/wiki/Decline_of_Buddhism_in_India http://www.asiantribune.com/news/2012/06/09/why-buddhism-prospered-asia-died-india

EDIT

Declination of BUDDHISM in Kerela.

The persecution and eventual exodus of Buddhists from Tamil Nadu to Kerala in the seventh century was occasioned by the fall of the Buddhist Kalabhras at the hands of the Pandyas.

The Buddhists came to Kerala and established their temples and monasteries in different parts of the country. The following Hindu temples were once Buddhist shrines: the Vadakkunnathan Temple of Trichur, the Kurumba Bhagavathi Temple of Cranganore etc.,

The Paliyam Copper Plate of the Ay King, Varaguna (885-925 A.D.) shows that the Buddhists enjoyed some royal patronage even in the tenth century.

The decline of Buddhism started in the eighth century with the arrival of the Aryan missionaries and the Brahminical religion. As mentioned earlier, the Brahmin scholars defeated Buddhist monks in debates and established the superiority of the Hindu religion. Adi Sankaracharya, the Hindu revivalist, was also responsible for the fall of Buddhism; he founded Hindu monasteries and trained Hindu priest-scholars to combat his Buddhist adversaries. Buddhism faded away gradually and completely disappeared during the reign of the Vaishnavite Kulasekharas in the eleventh century. What actually happened was that Buddhism was reabsorbed into Hinduism from which it broke away. Many Keralites, like the Ezhavas, who were most likely Buddhists once, gradually became Hindus.

Further reading

Though i haven't read this book, it seems to be worth reading.

Buddhamathavum Jaathi vyavasthayum" by K.Suganthan.

Origins: There are slightly different views on when Buddhism entered, flourished and declined in the Kerala region. The region itself has been variously designated through history as part of the Chola kingdom (from 150 C.E.) and later as the state of Travancore under the Tirunals prior to India's independence.

One view is that Buddhism flourished only for a short period of 200 years or so in Kerala.

Other views may hold that Buddhism entered Kerala on its way to Sri Lanka, or may have even come the other way round as Theravada Buddhism from Sri Lanka.

The Paliyam Copper plate apparently proves that in the reign of Ashoka Buddhism was introduced to Kerala.

During this period, the Emperor`s son Mahindra headed a Buddhist mission to Sri Lanka. For more than 700 years, Buddhism flourished in Kerala. The Paliyam Copper plate of the Ay King, Varaguna (885-925AD) shows that at least in South Kerala, Buddhists continued to enjoy royal patronage even until 1000 AD.

Decline:

From 800 C.E. there was a Bhrahmanical revival in the region.

During the time of Maurya Sharman, a Kadamba King, large colonies of Brahmins from North India were invited to settle in Tulu and Kerala. In 792 AD, King Udaya Varman of Mooshika dynasty settled 237 Brahmin families in Kerala. One tradition has it that six outstanding Brahmins came with these immigrants, defeated Buddhist leaders in public debates and established the intellectual supremacy of Hinduism.

S Ramanath Aiyer, in his A Brief Sketch of Travancore (this version printed in 1903) wrote:

Bhattacharya, Bhattabana, Bhattavijaya, Bhattamayukha, Bhattagopala and Bhattanarayana were the apostles and they brought all the forces of their dialectics to bear upon the subject and converted all to the cause of the Hindu Triad. Sasthrakali, or a species of worship peculiar to this country is the sole product of their triumphant compromise. The deity worshipped is Sastha, the divine offspring of Vishnu and Siva.

It is contended that Buddha was re-assimilated into Hinduism as "Shasta", a Hindu deity- the afore-mentioned snake deity.

Later, scholars like Guru Prabhakara and Shankaracharya (788-820 AD) reinforced the supremacy of Hinduism. This led to the royal patronage and promotion of Vaishnavism by Kulashekara Kings of the Second Chera Empire. Budhhist and Jaina temples were taken over and appropriated by the Hindus, and converted to Hindu temples. Examples of such temples are still extant.

The temple in Chitral in South Travancore is one of the several instances in point. It was formerly a Buddhistic Temple. The idols that we see in and about the temple prominently suggest Buddhistic Sculpture.

However, one of the main reasons of the decline of Buddhism could be inherent complexities in its philosophy.

In his 1980 essay "The Disappearance of Buddhism and the survival of Jainism in India: A study in Contrast", Padmanabh S. Jaini mentions R. C. Mitra's reasons for decline of Buddhism:

1. "Exhaustion"
2. Withdrawal of royal patronage
3. Brahmanical persecution
4. Muslim invasion
5. Internal corruption and decay
6. Divisive effect of sectarianism
7. Insufficient cultivation of the laity.

He however contests these on several counts, including exhaustion. His main point is that Buddhist philosophy itself led to inner contradictions that were difficult to resolve:

...the doctrine of the heavenly bodhisattvas made Buddhism uniquely vulnerable to the assimilating tendencies of the surrounding Hindu cults. The development of the heavenly bodhisattvas theory, and indeed that of the entire Mahayana in Buddhism, can perhaps be ultimately traced back to the celebrated "silence (avyiikrta) of the Buddha", his unwillingness to commit himself regarding certain fundamental philosophical issues. The inability of the Buddhists to agree upon the meaning of this silence led to a situation in which various contradictory absolutist doctrines could emerge, each one claiming to be the correct interpretation of the master's teachings.

For another answer which deals with decline of Buddhism in India from 12th century, also see this thread