So the reason why we use mevushal (cooked) wine is that it's seen as a wine inferior and incapable of being offered to an idol (Shulchan Aruch, YD 123). I understand why one can drink mevushal wine in this sense, but why is it good enough for kiddush? Are the requirements for kiddush less stringent then that of idol worship? Furthermore, the mevushal wine we drink today isn't exactly poor-quality. I've heard that even Catholic churches buy Rashi wine for their communions. Isn't there a problem with mevushal wine, at least now?
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The Rosh ,based on the two sevaras given in Avoda Zara for the issur, explains that the issur of yayin nesech is not solely an issue of avoda zara but additionally an issue of mingling with non-Jews (משום בנותיהן). If this is so, he asks, why would mevushal wine be any less likely to cause mingling between jews and non-jews?
He also asks even if one just focuses on the nesech issue (that mevushal wine is not good for avoda zara) one does not come out any better because mixed wine (יין מזוג) is also not good for avoda zara, yet there is still an issur if a goy touches it.
His answer (to both questions) is that mevushal wine is not common and the Rabbis did not make a gezera on uncommon things.
While this may not be the sevara given by the Shulchan Aruch it would answer your question...
Also look here for a full discussion of the heter behind yayin mevushal(Gemara, rishonim etc) and their applicability today: