It was likely both a piece of pro-Athenian propaganda and an allegory to allow for philosophical exercises created by Plato at a time of conflict among the Greek city states, the Peloponnesean War. The Atlanteans, no matter how advanced, were doomed to be destroyed when they tried to mess with Athens and the will of the gods. They were probably loosely based on the Minoans and eruption of the Thira/Santorini 1200 years prior. It was one of the biggest eruptions in history that helped to greatly re-shape early Bronze Age cultures around the Mediterranean-- just long enough prior to dance that line of vague cultural memory and fantastic myth.

Source: Classics & Ancient Mediterranean Studies and History double major/ lifelong Greek history nerd