I'm going to say, Mikem, that you have hit on something that probably goes beyond this conversation to a whole host of issues, some of which would be--I think--insensitive to deal with because there are Germans on this site, and they have a unique relationship with this subject, so I refuse to partake in that discussion because I don't want to accidentally belittle it, but that brings me to the crux of the issue with a German player character in a FPS game.
You run a great risk of doing the subject matter a terrible disservice. There are subjects within that period of German history that would--again I think--be grossly diluted by the mechanics of such a game. Spec Ops gets its brilliance because it calls in the very nature of action-hero games and outright and unfairly shames the player, but that's the point.
However, turning Nazi-era Germany into a power fantasy is just way too easy. I think the interactive experience required to do justice to that time period would have to be without flaw. Any flaw in the game is possibly a point where it'd be destroyed.