Ran across this on the wikipedia page for Lithuanian Jews yesterday when trying to figure out if my ancestors called themselves Litvaks 100 years ago as a geographic or a religious affiliation.
“Lithuania became the heartland of the traditionalist opposition to Hasidism. THEY NAMED THEMSELVES “misnagdim” (opposers) of the Hasidi. The Lithuanian traditionalists believed Hassidim represented a threat to Halachic observance due to certain Kabbalistic beliefs held by the Hassidim, that, if misinterpreted, could lead one to heresy as per the Frankists.”
If the term misnagdim was a title they created for themselves then originally it was not pejorative to them. However since it emphasizes the dangers they saw in chassidism it was perhaps originally pejorative towards them. So maybe it’s been twisted since but the discontinuance of that term seems more about Litvish accepting Chassidim today then finding it offensive.