Probably a better explanation of why the Celts put out their fires was not to dishearten spirit possession, but so that all the Celtic tribes could relight their fires from a common source, the Druidic fire that was kept burning in the Middle of Ireland, at Usinach.
Some accounts tell of how the Celts would burn someone at the stake who was thought to have already been possessed, as sort of a lesson to the spirits. Other accounts of Celtic history decredit these stories as myth.
The Romans adopted the Celtic practices as their own. But in the first century AD, Samhain was incorporated into celebrations of some of the other Roman traditions that took place in October, such as their day to honor Pomona, the Roman goddess of fruit and trees. The symbol of Pomona is the apple, which might explain the source of our current tradition of bobbing for apples on Halloween.
The force of the practices also changed over time to become more ritualized. As belief in spirit possession diminished, the practice of dressing up like hobgoblins, ghosts, and witches took on a more ceremonial role.

The custom of Halloween was brought to America in the 1840's by Irish immigrants escaping their country's potato famine. At that time, the favorite pranks in New England included tipping over outhouses and unhinging fence gates.

The custom of trick-or-treating is thought to have originated not with the Irish Celts, but with a ninth-century European custom called souling. On November 2, All Souls Day, early Christians would walk from village to village begging for "soul cakes," made out of square pieces of bread with currants. The more soul cakes the beggars would receive, the more prayers they would promise to say on behalf of the dead relatives of the donors. At the time, it was believed that the dead remained in limbo for a time after death, and that prayer, even by strangers, could expedite a soul's passage to heaven.

The Jack-o-lantern custom probably comes from Irish folklore. As the tale is told, a man named Jack, who was notorious as a drunkard and trickster, tricked Satan into climbing a tree. Jack then carved an image of a cross in the tree's trunk, trapping the devil up the tree. Jack made a deal with the devil that, if he would never tempt him again, he would promise to let him down the tree.
According to the folk tale, after Jack died, he was denied entrance to Heaven because of his evil ways, but he was also denied access to Hell because he had tricked the devil. Instead, the devil gave him a single ember to light his way through the frigid darkness. The ember was placed inside a hollowed-out turnip to keep it glowing longer.
The Irish used turnips as their "Jack's lanterns" originally. But when the immigrants came to America, they found that pumpkins were far more plentiful than turnips. So the Jack-O-Lantern in America was a hollowed-out pumpkin, lit with an ember.

So, although some cults may have adopted Halloween as their favorite "holiday," the day itself did not grow out of evil practices. It grew out of the rituals of Celts celebrating a new year, and out of Medieval prayer rituals of Europeans. And today, even many churches have Halloween parties or pumpkin carving events for the kids. After all, the day itself is only as evil as one cares to make it.