There is nothing demeaning about use of the term “sheep” per se. In this context, it was simply a metaphor representing a creature minding its own business and of a gentle and usually cooperative nature that would follow the leader, do what others are doing, and not be disruptive or reckless in wandering away from the herd, with determination at least. So this is not a bad description of the average person, as most people are gentle souls who only wish to go along and get along, see to their own needs to be sure, but also the needs of their loved ones and aspire to be of service to the community as well through doing useful work and perhaps even going above and beyond paying taxes to volunteer for just causes, and so on. Certainly, most people are sympathetic even though they may be apathetic as well, and never quite motivated to make a personal sacrifice of their time, but at least are not oppositional nor troublemakers in other respects, but simply want to be good citizens if left alone. So most people get along with their neighbors and fit into society without complaint or wrongdoing that could be harmful to others.
The designation of “sheeple” refers to the consequences of being trusting and cooperative when one is being led by falsehoods and manipulation and perhaps even being led to slaughter without realizing what is happening. This is true of both sheep and people under certain circumstances and again is not a fault per se, but simply a consequence of having trust and being disciplined with an inclination to be cooperative and cordial in their dealings with others, and to give others the benefit of the doubt at least. It is certainly much more the fault of the conman than the victim when they end up getting duped. The question arises in any context, “To what extent are the people in question simply unaware through no fault of their own because there are no visible signs of any irregularity or are they being manipulated to be complacent in the face of evidence that would otherwise be alarming and a call to action, and accordingly the people are being neglectful of their compatriots when they should be raising an alarm and taking action of some kind to ferret out wrongdoing underway?” So in that sense, one could say that humans are losing their humanity to the extent they are being blocked from their normal perceptions and inner awareness and choices because of the engineered complacency and thereby becoming complicit in the evil that is growing in your society.