Shipgate,
For many things (especially personal slights and embarassments), I'd say you are right. But the holocaust was so horrific, I don't know that jokes about it will every really be appropriate (imagine joking about the Batan Death March. I don't see that ever being appropriate, either). I am also a part of an ethnic group that a nation once tried to exterminate. I'm not bitter about it, but I don't really feel a lot of humor in jokes about the extermination order that existed against us.
However, with the topic at hand, I do think the avatar is a funny characature, and should not be deemed offensive. If anything, it's a slam on Hitler, not on his victims, and I'd say Hitler still deserves some good slams.
Don't worry, I know what you were trying to say, Shipgate. No offense was intended, and none is taken. I'd just steer clear of those jokes and substitute some other humor instead.