Kingsrings and Auntie Venom, I agree completely that this is the same dark type of humor in "Springtime for Hitler" and other Mel Brooks goodies. I typically love that kind of thing. "To Be or Not To Be" had me rolling on the floor.
My big points of contention (for total rudeness) are that this is a) public, and b) timed (accidentally or not) to co-inside with Hannukah.
Would you feel comfortable telling a local Rabbi, a Jewish co-worker (not a dear friend) or Jewish teacher at your/your kids school: "Boy, I though those Nazi gingerbread men were funny. I don't know why anyone got upset because they went up the day before Hannukah, in a public place." Consider, would the way and time the display was done seem so funny then, or would you feel you had to do some quick explaining about your sense of humor and what you thought the thing meant, before you were taken as a racist?
If the holiday spirit is about everyone, why do this? This is art- let it be appreciated by those who will enjoy it and ignored by everyone else. Don't put it out on a street where everyone has to see, especially since the details wouldn't be evident from a distance.