Maybe she's exhorting us to "do the right thing?" I do not read German well enough to determine one way or the other.
Yes, she is doing that, and she is also satisfying a part of the voters. Additionally this whole morale debate is probably also about the Future of a political Western Block whose balance of Power and diplomatic influence has been destroyed by the Fall of Russia. Oh, that was cynical.
And what would "the right thing" be? Tolerance? Embracing Diversity? Going on a quixotic quest to find the mythical moderate Muslim?