Declared Heresy in the Second Century

Beliefs do not usually get outlawed for no reason. The two-powers teaching did, and the timing tells you why.
It "was endorsed within Judaism until the second century AD", and that Judaism "eventually declared the two powers doctrine heretical as it was a useful apologetic for the Christian belief in Jesus as God."
Read that sequence carefully. The doctrine was not rejected because someone found a flaw in the exegesis. It was rejected because Christians were using it - pointing at a framework already present in the Scriptures and saying: this is who Jesus is.
The suppression came after Jerusalem fell, at Yavneh, as a boundary-drawing move against a movement that had learned to argue from shared ground.
Which means the New Testament writers were not smuggling a foreign idea into Judaism. They were using its own furniture, and it got moved afterwards.
Scripture links:
- John 10:30-33 - "you, being a man, make yourself God."
- Matthew 26:63-65 - "He has uttered blasphemy."
- Daniel 7:13-14 - "to him was given dominion and glory and a kingdom."
The category was closed after the argument, not before it.