You also said the US government would do nothing to help.
Any government can screw up. But Germany would not knowingly write the letter to someone raised as an American with an American passport, living in America. If the parents had tried to game the system by claiming dual citizenship for their child and raised him in Germany with a German passport, that would be different.
If he was raised in America with an American passport, the US government would not extradite him to Germany to serve in the German military.
No, they had no intent to game the system.