Yeah, it is stupid, but these cases of censorship are very much a product of their time, because Germany saw a huge moral panic regarding video games in general during the 80s and 90s, when lots of very, very harmless games were put on the index for no good reason whatsoever.

Now combine this panic with the general fear that German authorities seem to have in regards to any Nazi symbols and you get this situation. (The underlying idea is apparently that any open display of a swastika or such could be mistaken as pro-Nazi propaganda, regardless of context. That's why some moron around here tried to ban a teaser poster for Art Spiegelman's acclaimed comic "Maus". The German government even tried to push for an EU-wide ban on the swastika, completely ignoring the various groups to whom it is a sacred symbol.)

Indiana Jones and the Last Crusade, for example, was censored preemptively by the publisher to avoid any problems (which is how it almost always works, even in regards to violence), even though the movie it was based on got released uncut with an "ages 12 and up"-rating, but Wolfenstein 3D caused such an enormous stir that it was outright banned, with a lot of other games following in its wake.

However, these are very old court decisions and it seems that authorities have loosened up quite a bit when it comes to newer releases. I mean, publishers still only released censored versions of games like The Saboteur or Wolfenstein: The New Order in Germany, but the uncensored versions of those titles weren't banned or indexed, which is at least a step in the right direction.