It was brought as a 'cool' curio. The Fremont neighborhood is not communist, it has lots of leftover hippies and characters that like to accent certain corners and niches with curious landmark features. Here's a few other accents:
Fremont Bus Stop - "Waiting For The Interurban" 
Fremont "Rocket" - constructed from cold war army surplus fuselage parts. 
Clown statues - "Late for the Interurban"
And of course the 18-foot tall "Fremont Troll" under the 99 Bridge. The Volkswagen Beetle has since been removed ostensibly for safety/liability reasons. 
Fremont denizens like to dress The Troll up for special occasions.
Most of the Hippies in Fremont are networked in with artists and musicians, or businesses that are offshoots of them or their family members. Dave Matthews is one example.
There are some communists in Seattle but not many, then every city has a cult of communists. The socialists on the City Council are hated and will fade away probably soon. The King County Elections and the Seattle municipal elections office have been corrupt for decades but the City has always been ruled ultimately by practically-minded business owners, especially long term landmark businesses. Presently, there is a building boom downtown from the presence of Amazon and the need for housing. But there is also the San Fran phenomenon of human feces and syringes on the street along with criminals released hours after they are arrested.
I see a resurgence of Seattle businesses which are in a state of both decline and ascendancy. There will likely first be more decay to city businesses. But always when businesses fail, eventually things get serious and practical to a point that the socialist idiots are booted.
But the Hippies in Fremont will always have their niche in the City's culture.
The culture in Fremont is one of fun and out-of-the ordinary. Between stop-in breweries (Hale's Ales), great Greek restaurants, and a slew of curio shops, open rock & roll dive bars for groups just starting out, tea cafes and dress shops, the Lenin stature is pretty much ignored and not even in the very center of where the action is. It's off to the side.
That said, I think it would be appropriate for a side memorial plaque reminding passersby of the tens of millions of innocent people that died or were murdered under Lenin's tyranny. And someone could paint the statue's hands blood red. But then the statue wouldn't be a curious object. it would become a serious object and would likely be removed as 'serious' in not in Fremont's off-the-wall culture.
A large bronze metal plaque perhaps embedded in the concrete sidewalk in front of the Lenin statue attesting to the horrors of the man would fit with the district's zeitgeist.
