To quote from Engaging anthropology: the case for a public presence By Thomas Hylland Eriksen
Anthropologists have noted, with some irritation that none of the leading advocates of memetics discuss earlier work on cultural diffusion, which is very considerable.
The accusation is probably correct. So, a few brief words from me about cultural diffusion.
First a couple of popular articles on the subject - to provide some context:
http://en.wikipedia.org/wiki/Diffusion_of_innovations
http://en.wikipedia.org/wiki/Trans-cultural_diffusion
To a certain extent, the issue is one of terminology.
Memetics replaces the concept of cultural diffusion with cultural epidemiology - the idea that ideas spread contagiously - like mind viruses - and that epidemiology is a more appropriate metaphor than diffusion was.
On the positive side, terminology based on epidemiology captures the ideas of cultural immunity, vectors, resistance, rapid evolution and pathogenic infections well. On the other hand, it is hard to spell, and tends to suggest ideas are more pathogenic than they are beneficial symbionts - which is not necessarily accurate.
Diffusion tends to conjur up the idea of physical diffusion processes (such as gas diffusion) more. It fails to capture the dynamic, biological side of the process. There is no hint that the ideas might evolve. On a more positive note, it is more neutral about whether the culture is beneficial or harmful to the DNA it coexists with.
I don't think there is much of a contest really. The memetics terminology is much better. The anthropological terminology seems to have been largely abandoned by anthropologists since then as well.
So: the idea of cultural diffusion was a rather weak one - let it die off naturally.
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While I understand the point about terminology differences, I believe you are missing the nuance of the idea of cultural diffusion, and hence the criticism cultural anthropologists have spoken of. Diffusion is not a direct transfer of an idea from culture to another. It is not a copy, not a direct replication, but incorporates the idea of cultural filters, resistance, immunity, and similar concepts you have mentioned with epidemiology. One culture being exposed to another's ideas does not simply incorporate those ideas directly, but incorporates them over a period of time using their own world views/cultural interpretations. This transfer can happen very slowly, or take place in a short period of time, contributing to the idea of diffusion rather than transfer. Additionally, as indicated, the transfer is not a copy, but a diffused (altered) idea of the original. In this manner, I believe the cultural anthropologists make a good point - Memetics has failed to actually explore the decades and decades of anthropological discussion on how ideas transfer. The concept of cultural diffusion is still taught in university courses, and used in anthropological and sociology works, but I agree that it is not as hot of a topic as before. In short, the concept has pretty much been extensively covered and anthropology has moved on. But if Memetics which to beat that horse some more, they are more than welcomed to it (but they should really explore what has already been in other fields).
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