I think it's more on the sad side. My mother, for instance, doesn't use that word, but often talks about me 'rethinking my religious viewpoint'. I like that she somehow kinda recognises that -for me- its not just 'a phase', but it still just smells of disapproval.
From my time in the fold, I remember sensing lots of semantical trickeries. The church IS prepared to deal with us atheists. Evidence that it's been dealing with us within her skirts for centuries can be found in the way catholics automatically deal with non-belief with terms like 'lapsed catholics' and 'spiritual doubt', and how we have to pray to the holy ghost for faith and guidance etc. It must be something in the wafer. [HAHAHA I liked that one, can I copyright it or something?]
I've never actually heard the term "lapsed Catholic" outside of this forum, although I've heard the term "fallen Catholic" from several quarters. All of my friends and relatives, Catholics or otherwise, know I have a Catholic background, but have always referred to me as an atheist. At my age, I wouldn't be afraid to tell any of them that I consider being referred to as a "fallen" or "lapsed" Catholic to be a dastardly insult, and would be quick to correct them in words which would be unquotable here.