Neanderthals were human. Completely human. But just like with the African Blacks and the Australian Aborigines, their lifestyle and culture simply may not have been as "advanced" as others who wanted to deny their humanity and consider them to be "sub-human" and "exploitable." 
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And just as Racists once denied that African Blacks or the Australian Aborigines were fully human, the same racist attitude goes on when it comes to Neanderthals. "We" always, it seems, want to treat "others not like us" "different"....even when they really aren't. 
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It is quite possible that Neanderthals may have "died out" do to a variety of factors (conflict, war, disease, environment changes, etc) but, more likely than not, they simply assimilated into the culture and society of their neighbors.