There is no problem with dressing up as Hitler, Satan, Stalin or any other figure of evil. With regards to dressing up as Hitler being offensive to the jews, well, how about white people just being white and that being offensive to the blacks for the 400 or so odd years of slavery whitey put them through?
I can't agree, and I don't think that's a sound analogy. White people can't help what they look like; unless you're Michael Jackson, skin color isn't exactly a choice

If someone finds whiteness offensive because of slavery, they're a racist asshole and that's their problem.
Dressing up as Hitler, OTOH, IS a choice. Everyone knows Hitler's reputation, and it's no secret that many folks don't like to be reminded of Nazis. I can appreciate that. I can't imagine why anyone would want to resemble that monster in any shape or form anyway.
Someone will probably bring up intentions. As far as that goes ("I didn't mean to upset people by dressing up as an inflammatory figure"), I'd say it's irrelevant in an extreme case like Hitler. The effects of an action are usually far more meaningful than the intent behind it. Kinda like if I serve to avoid hitting a squirrel in the road, but in so doing, I accidently run somebody down with my car. I didn't intend to hit them; I just wanted to miss the squirrel. But I doubt that'd give them much comfort in their stinky hospital bed!