1. Hitler's lust to destroy the Jews was not based on religion. What it was based on is really pretty mysterious; there is a black hole at the bottom of the Hitler phenomenon that only the Last Judge is ever going to penetrate. See Ron Rosenbaum's impressive book, Explaining Hitler : The Search for the Origins of His Evil . Though I would probably be considered too "liberal" by some posters here (in my own mainline denomination I'm a raving conservative), I think that the most likely explanation is that he sold his shrivelled soul to Satan. And I mean that pretty literally.
2. Traditional Christian anti-Judaism did not call for the murder of Jews, though it sometimes led to it when mixed with "urban legend" blood libels and crowd hysteria (sometimes manipulated by rulers who wanted to get rid of their creditors). Most Christian teachers believed that the Jews would turn to Christ before the Last Day, so that destroying the Jews would be against God's plan.
3. Nevertheless, the tradition that the Jews having rejected and killed the Messiah, were rejected by God in turn, contributed to mistreatment of Jews in two ways:
(a) It gave the Jews an almost completely negative profile, thus encouraging Christians to dislike and despise them;
(b) It taught Christians that until the Last Times the Jews would suffer under God's constant punishment. It was this latter belief, I think, that made German Christians so passive in the face of genocide: they had been taught to see Jewish suffering as normal and natural.
4. The Christianity of many Protestant Germans in the '30's was pretty attenuated. Widespread inroads of liberal theology and a long history of state domination of the Protestant Churches had made their mark. Just before WWI, the big issue in German Protestantism was whether the Apostles Creed should be eliminated from worship, since "nobody believes that virgin birth and bodily resurrection stuff anymore."
5. To account for German acquiescence and willing collaboration in the destruction of Jews, you have to consider the years of unchallenged anti-Semitic propaganda the Nazis bombarded them with after '33. Exactly the pattern Arafat has followed in the PA: take power by appealing to all sorts of frustrations and fears, then control the media and turn the population into a murdering horde by continuous indoctrination. The churches were a weak and uncertain influence in comparison, by and large.
6. The rejectionist view of Judaism prevalent for a long time in the Christian tradition is now widely seen even by thoroughly traditional Christians to have been contrary to Scripture. Evangelical Christian Zionists are not the only Christians who have rethought this. "Mainliners" in the tradition of the Swiss Protestant theologian Karl Barth have too. The present-day anti-Jewish forces in Christianity are the out-and-out liberals.
7. Hitler saw more clearly than Christians mostly did that Christianity and Judaism are inextricably linked. His racial hatred of Jews spilled over to a hatred of the Jewish blight of Christianity. Christians have reason to be abashed that an enemy of God saw this before we did.
Kershaw attempts to answer a lot of these types of questions. His conclusions are always compelling and usually spot on.
The Nazi's were ruthless dictators. For the German Christians to overtly oppose The Nazis meant certain death. I asked my father in-law who grew up in Germany during the war, why the German people didn't overthrow the Nazis when they realized what the Nazis really were. He said, that when an individual citizen took it upon himself to kill a Nazi in resisitance, the Nazi's would indiscriminantly start killing people in the area, including women and children. Resistance was thereby quickly and efficiently quelled.
Also the intelligentia in Germany had essentially abandoned Christianity in the 19th century. In academia, after, Freud, Darwin, Hegel, and Nietzsche, Christianity was dead. Even seminaries abandoned belief in historical Christianity. Although, the effect of this on Christianity at the time may be hard to determine, undoubtedly it resulted in a weakening of the influence Biblical Christianity had on the culture. If Christainity shares some blame for not fully resisting the Nazi's then surely the atheistic intelligensia also shares in the blame, by weakening Christianity's positive moral influence over the people, without providing an effective alternative, and by paving the way for socialism and its blind faith in the state as the solution to all problems.