Hitler really did intend to kill them all and run the Ukrainian grain fields with Slavic slave labor and Aryan overlords. It's the stuff of very bad science fiction but he was absolutely serious about it. Most of his generals - Manstein in particular, who loathed the
einsatzgruppen and threatened to shoot them - went along with it because it was the only war they had and at that point the Russians weren't likely to be in a negotiating mood anyway. But he knew, and said so, and I don't think it was just Nuremberg hindsight. And he went along with it anyway.
So yeah, I agree with you, Germany's military fate was sealed when Army Group Center failed to take Moscow. They fought a good game afterward, but it was pretty much set after that.