I think the default wargaming approach is to say “this isn’t a game about politics, it’s a game about a commando raid in France in 1942”. Which I suppose is all right as far as it goes, if you can assume that everyone already knows about Nazis (which, given that a lot of hex-and-counter wargames got designed in the 1950s and 1960s, was a reasonable assumption).
Clearly that’s not the case now for many people. People my age in the UK (growing up in the 1970s-1980s) didn’t get told about Nazis, or WWII at all, because that was the boring thing the older generation cared about. There were still WWII-themed comics but I didn’t know anyone who read them (and those most certainly were glorifying war, as a place where men can do manly heroic things).
I think it’s now reasonable to say that a modern game should have at least a bit of background material about who’s fighting and why. One problem for me of the demonisation of Nazism that was the only way it was ever mentioned to us – the idea that it was a uniquely horrible thing which must be avoided forever – is that it becomes easier for someone to say “well, I’m not wearing that insignia or invading Poland or attempting genocide, so I must not be a Nazi”. But I have been saying for years, and in the last few years many people have noticed and joined me, that nobody sane sets out to Do Evil: they do the things that seem to make sense to them at the time, given their hopes and fears (as manipulated by others), and a step at a time they can become people who do great evil without ever having noticed the transition.
On the other hand some random platoon leader on the Russian front may have been a rapist (on either side, chances are) but that isn’t something that is, or can be, reflected in a tactical game of putting the soldiers in the right place with the right orders. As an ethical wargamer I consider it my responsibility to be aware of that kind of thing. [eta - that kind of context, because the game isn’t going to tell me about it. And if I were designing a game in that setting, I might put it into the rules too: “if you send one soldier to take up an ambush position in a bombed-out house, he may get his throat slit because of what he did last night”.]
So yeah, a typical historical wargame is not at all uncomfortable in the way you describe. And if someone came along who was predisposed to think of the Nazis as good guys, they usually wouldn’t find anything in the game to change that opinion.
A side note: one of the huge problems of traditional wargames for me is not that they glorify war but that they make it bloodless. I don’t mean that I want gore, but – well, take some SF games, which don’t have the Nazi problems at all. But in a typical scenario for OGRE or Battletech it’s absolutely fine for one side to lose nearly all of its units as long as it achieves the objective and wins the game. Show that to a real military leader and they’ll laugh: what about the next attack? One way of fixing that is to play several games in a row with one side fielding the survivors of the previous game…
It turned out that my personal sticking point was the old men and children of the Volkssturm in the last days of WWII: not only do I not want to play them on a wargame table, I don’t want to play the forces opposing them either.
A side note: for over ten years now I’ve been running an RPG campaign set during WWII, with the complication of hidden magic returning to the world and being used by both sides. One of the earliest decisions I made was to say that the vast majority of the evil is still human evil: to say “the Nazis were driven by demons” would have been to discount the genuine (and to my mind much more real) horror of people who would do those things when not driven by demons.