I'm going to still go with that it was a combination of not knowing and not wanting to know.Germany was full with concentration camps - Dachau was opened 1933 - but these were prison camps for those opposing the regime, and up until 1939 if you got into one of those you had a decent chance to get out again within a few months (psychologically completely broken, but alive).
The death camps were far out in the east and since general population was aware of the "normal" prison camps they simply assumed that those are a larger version of the same.
We are social animals and we conform. Or, that's not really saying it right. We do a good job taking care of friends and family and people around us. We typically just don't have the skills of addressing big societal injustices in a way which makes a difference, including pointing out better alternatives.
Look at my own country the United States and how few people actively worked against slavery while it was still going on. And how few people actively worked against mistreatment of Native Americans. The operating principle seems to be, well, we're not bad people, and therefore we're not doing something wrong. That is, it's social first and filling in the logic later.
This runs very deep. This is the whole reason a baby will smile back at you. We're social animals, which is generally a very good thing. Just in certain large-scale situations, it works against us.
And the coin of the realm for effective activism seems to be slightly understating your case. And it's not like in the most important situations or with the most blatant injustices this relaxes. No, on the contrary, this is all the more reason to play your best game.