Look at the propaganda at the time. The Nazi party blamed the jews for all of the problems, literally everything -economic problems, unemployment, all the hurt and pain the nation had endured since the end of WW1. It was very effective.

Children were growing up on this stuff, they simply didn't know any different. Did you know that young girls were told they could 'gloriously' serve Hitler by having ayran children ? 15/16 year old girls would become pregnant by soldiers or Hitler Youth in order to ensure the Third Reich would carry on. The boys of course were in the Hitler Youth and were already learning to become soldiers to serve. Looking back its quite frightening how so many people became brainwashed. Their loyalty to Hitler was (in the main) unwavering.

It must have been an awful situation as the war progressed and people working at the camps came to the realisation that Hitler was not of sound mind. There they were, doing this work that they've probably come to realise is wrong, yet they can't stop it, if they leave they'd be charged with desertion and shot. Should be noted that from the outset in the mid 30s some Germans thought Hitler was a nasty piece of work, but they were in a tiny minority and would have been locked up, maybe even killed if they had voiced their opinion to family/friends etc.

Edit: Just came across this slightly related question, the replies may give some idea of how strong the propaganda against hte jews was: http://www.reddit.com/r/AskHistorians/comments/1v9v0k/why_did_hitler_hate_the_jews_to_the_level_where/