The expanding circle refers to the range of sentient beings that humans include in their scope of concern. The fact that we have recognized the non-existence of gods or the non-sentience of a fetus is not the same as shrinking or the circle. The fact that we no longer have concern for the dead is, again, not relevant. Our consideration for property is equally rejected by this simple consideration. You could certainly argue that from the perspective of a past human, the circle would seem to shift, but that does not change the fact that using our reasonable modern understanding of the world, the scope of human concern for sentient beings has consistently expanded, rather than shifted.
I deeply and truly want to believe this, but I wonder what empirical evidence Singer has that materialistically driven individuals are less happy than altruistically drive individuals. I agree that inwardly-focused or possession-focused individuals are less happy, but I don't believe that altruists are any more happy or satisfied with their lives. Having read several books on the science of happiness, but also having a small and forgetful mind, I am left only with a basic impression of our state of understanding. I also wonder how many of the results we do have are simply correlations based on a simpler underlying factor. As an examples, it has become widely reported and known recently that those who spend money on experiences, rather than things, tend to be happier people. But could it be that the relevant factors is an inclination towards greater social engagement, which leads to both happiness and spending on experiences? And again, we are told that practicing forgiveness leads to happiness-- but those who prefer isolation don't need to forgive, those driven towards social engagement would be driven to forgive and resume the relationship.
I seem to have gotten off track, but here is my observation: I know many people who are altruistic, and I know many people who are consumeristic. I see no pattern in how satisfied they are with their lives that arises from these characteristics. Rather, I find that my wealthy relatives who spend ever more money on wine and food are very happy-- and they tend to eat that food with friends. I find that my wealthy relatives who spend their money on wine and beer are unhappy-- and they tend to eat it alone. I find that my altruistic friends who own a business and give generously to charity are unhappy, but my altruistic friends who participate in church drives or international aid work are happy.
As someone who is not socially engaged, who is highly altruistic and deeply unhappy, I find little encouragement in the idea that an ethical life leads to happiness.