1. The reason why the Confederate battle flag doesn't hold racist connotations for many people is because they have never been made aware of what truly led to the Civil War. Growing up in the Deep South, I was always proud of the Stars and Bars and owned one myself. We were taught in school that yeah, the Confederacy had slaves, but that the war was about state's rights and economy and so forth. It wasn't until nearly 25 years later that I learned that yes, the Civil War was indeed about slavery, that such was said and understood by leaders of both sides of the war.
In other words, it's not a matter of "social understanding and tolerance", but of education of what the heck really happened in history.
2. Napoleon once said, "There are no bad regiments, but only bad colonels." His point was about the importance of leadership, of course, but the point also applies to the accountability of a nation's military. Whatever that military does, it's understood that the low-ranking troops, the ground-pounders from mid-grade enlisted and below, should not be held personally responsible for doing what their nation's leaders (and the high-ranking officers in respective commands) order them to do. After all, it wasn't the thousands of Jews who served as enlisted and junior officers in the Wehrmacht who were hung at Nuremberg.
Germany doesn't have statues of Nazi leaders, nor do they tolerate public displays of the Nazi flag. We should take our cue from them.