It's an interesting mental balancing act they must perform, but it works for them. Before explaining, I must correct your words, though: they celebrate Mao, not his regime.
In 1911, the last dynastic Emperor was gone in China. After that, they had a series of bad governments, civil wars, and a brutal invasion by China. The last one was Mao's army chasing Chiang Kai-Shek to Taiwan*. Since then, they've had only one government, and for the last few decades, they've had the most amazing explosion of growth in the history of mankind. Many Chinese have hand-to-mouth existence in their personal memory. Mao is given credit for getting China past that, and he's not blamed for the"excesses"... particularly because Chinese are, like many Asian cultures, very highly reticent to admit embarrassments - particularly those on a global scale.
It's far easier to celebrate Mao for helping stabilize China and setting them up for their present ascendancy (and despising/regretting the terrible Gang of Four, which includes Mao's wife, for the Cultural Revolution), than it is for them to do the Western-progressive-liberal soul-searching and self-loathing that comes with admitting that your own government committed some of the most horrific acts in history. Add to that the fact that they are still controlled by an authoritarian regime (note: they're "Communist" in name only), and dissentious words by individuals can quickly and easily lead to very real repercussions, and you can start to understand why it's just easier to let the CCP have their little parties and celebrations, and vent rage at the other "more responsible" folk.
Further note: Chinese LOVE gossip. Along with being in a dense population comes the added issue of knowing that almost any whispered word can be overheard... and if it can lead to drama, there is absolutely NO shortage of wagging tongues to help see what can happen as a result. Again, Chinese culture is a HUGE factor in the psychological gymnastics they perform to love Mao and remain "rational". It's really fun to tinker with, as long as you never expect to make any progress. See below -
* - One of my favorite verbal prods is to argue with my Chinese friends that Taiwan does not belong to China... but China actually belongs to Taiwan! Mao chased Chiang away, but did not destroy that government. It still exists today. It never ended. Since it was the legitimate government of China before Mao, and it still exists, uninterrupted, then it must STILL be the actual government of China!
They really don't like it when I say that, LOL.
However, even the sweetest little Chinese college girls will quickly argue that, for reunification, they will happily pick up a rifle and fight for China. Happened to me again this weekend in Indy. Posturing or not, it is fascinating to behold.