No it isn't contagious, yes it CAN be genetic, Taktic is excellent to treat. It is usually used once a week for 5 weeks. One of the main things to concern yourself with is secondary infection from the dog itching. Mitaban is used to treat as well. Red Mange stems from an immature/weakened immune system. Generally once the immune system reachs maturity or is restored to full potential there is usually no other occurrences.
There is a good chance the demodex will show up again when the dog is stressed again, ie. Heat cycle, bad cut, hard hint, etc. Demodex is definitely a reason to cull a dog or at least remove it from the gene pool. There are too many good dogs around that don't have issues with demodex to breed or feed a dog that has it.JMO