Nope, he was still a mere archfiend in 3e. There was a single 2e source, which stood a little bit outside of all commonly shared setting and planescape lore, that stated him to be a greater deity. Only in 4e was he then officially recognized as a greater deity and since the 5e MM this has been revoked again.
As to the story side, he ascended when he apparently consumed a comatose deity, but in the end said deity was not quite dead yet and when he awoke and broke free of Asmodeus, the later lost a big chunk of his stolen divine power with his unwilling meal.
It hasn't revoked his power, according to the SCAG he's still a God in FR, the MM only says the power of a lesser God, because Asmodeaus power level varies by Setting, in FR and Nentir Vale he's a greater god, in Eberron he's not a God at all, just an Archfiends.