I actually went back to it and started reading it again to better understand the OP as my understanding of Vallée, thorough researcher that he is, that he is trying to draw express parallels between the modern UFO experience and the borderlines between humans and elves, spirits, faeiries, demons etc. as expressed in our lengthy history of mythology, folklore and the recorded stories across time that recount similar strange encounters. He's not trying to sell Magonia as ET so much as positing Magonia as a central metaphor for understanding the human relationship to these otherworldly parts of human imagination. The 900 cases listed in that text along with his wonderful detailed selections of UFO encounters are juxtaposed quite smartly up against very similar tales in the folkloric literature. These memorates are defining features of our persistent encounters with what appears to be otherworldly beings. Magonia, IMHO, is just a placeholder for a modern myth in the making.
Yes, in the past demons could be great stand ins for the greys, for the succubus that comes for us in the night. And you can also see how Keel, in his own crotchety manner, would place even more emphasis on the demonic aspects of these encounters - that was his own perspective on the narratives as he understood them, the way that Jacobs sees the imminent hybrid takeover, or Mack saw them as internal experiences. If anything, Vallée is much more flexible, evolving and probing in his imaginative approaches to the conundrum, but the one thing he is not is a slack academic.