It amounted to a mix of racism and practicality. The major (and totally unsubstantiated) concern was that Americans of Japanese descent would be sabotaging and destroying US military infrastructure to help Japan in the war, because of a misguided idea that the Japanese had some sort of divine loyalty to their emperor, no matter what country they lived in or were citizens of. California had problems with Asian immigrants of all sorts since the 1800s, including the Chinese. A mix of anti-Japanese hysteria in California, led by Governor Earl Warren (the same Warren responsible for the landmark civil rights cases Brown vs. Board of Education, Gideon vs. Wainwright, and Miranda vs. Sims, incidentally), combined with these war fears to culminate in a strong desire to intern the Japanese as "enemy combatants." However, this only applied to the Japanese in the continental US. Part of the reason this was doable was because the Japanese were a very tiny minority in the continental US, so any disruption by their internment would have been marginal (indeed many people essentially "stole" property of Japanese Americans, or purchased it for pennies on the dollar). On the other hand, the substantial Japanese population on Hawaii made up over 30% of Hawaii. Imprisoning them was both unfeasible and detrimental to the war effort, especially since Pearl Harbor was operating at maximum capacity. This was part of the reason why the Japanese American volunteers came primarily from Hawaii-they had less restrictions on them than internees, and they also were not as resentful against the US government as a result.

On the other hand, it would have been extremely difficult to do so for Germans and Italians, because so many Americans are of German and Italian descent, and it would be very difficult to track them all down. Also, they were white (although there was some lingering resentment against Southern Europeans like Italians).

There was certainly a double standard applied: a key part of the rationale for interning the Japanese population was that you couldn't be sure where their loyalties lay — which is particularly problematic when you consider that the majority of the Japanese-American population were nisei or sansei, meaning they were second- or third-generation Americans. Only about a third had been born in Japan. That same litmus test wasn't applied in any serious way to the substantial German-American population.

I'd argue that indicative of a certain degree of simple racism. From a postcolonial theoretical perspective, you could argue that it was easier to 'other' (in the Edward Said sense of the term) and arguably dehumanise Japanese-Americans than European immigrants — and thus easier to rationalise degrading treatment and some pretty sweeping violations of their civil and constitutional liberties.

On the German question, the short answer is that some Germans were interned — it just happened on a significantly smaller and less systematic scale than Japanese Americans. The core problem was that the German/German-descendant population in the US was so large that it would have been near-impossible (practically, politically and economically) to carry out a full-scale internment programme.

Someone else asked much the same question a few months ago, so I'll quote the answer I gave then:

From Personal Justice Denied, the report of the Commission on Wartime Relocation and Internment of Civilians (p289):

The American population of German descent in 1940 was so large that any major program of exclusion or detention would have been very difficult to execute, with enormous economic and political repercussions. In 1940, 1,237,000 people of German birth lived in the United States... Further, if one considered the children of families in which both parents were German-born, the number of Germans reached 5 million and, counting families with one German-born parent, the number rose of 6 million. A population of that size had political muscle; the industrial northeast, the midwest and the northern plains states all had substantial German American voting blocs. Radical measures such as exclusion or detention would have carried a very heavy political cost.

There's a whole chapter on Germans and German-Americans in the report which analyses your question in great detail — there's also a good argument to be made about systemic racial prejudice against the Japanese (which simply did not exist in the same way directed towards Europeans.)

Important to acknowledge, however, that there was some limited internment of Germans in America — about 11,000 in total during the war, or 36% of the total interned under the Justice Department's Enemy Alien Control Program. From the report (emphasis mine):

Immediately after the Pearl Harbor attack, the FBI picked up Axis nationals whom they suspected, frequently on the basis of membership in suspect organisations. By February 16, 1942, the Justice Department had interned 2,192 Japanese, 1,393 Germans and 264 Italians. (p284)

There were also forced deportations/pseudo-extraditions of around 4,500 Germans from Latin America to the United States, where they were interned on the orders of the State Department's Special War Problems Division.

I know that OP was most likely referring to the United States, but I figured I would add a little about the Canadian context. As in the United States, Canada also interred Japanese during the Second World War. Similarly, this was done primarily on the West Coast where there was a history of anti-Asian sentiment and racism going back decades. In 1907, for example, an anti-immigration rally in Vancouver turned violent as white mobs attacked Asian communities [source] (http://www.library.ubc.ca/chineseinbc/riots.html). Fast forward to 1941 and the Japanese attacks on Pearl Harbour and Hong Kong were used in many ways as an excuse to remove the Japanese from British Columbia.

To further answer OP's original question, German and Italians were also interred during the Second World War. Like in the US, however, this was done on a much smaller scale. In fact, the RCMP was much more focused on the actions of individual German and Japanese residents as a prerequisite to internment than they were in the entire German or Italian communities. In other words, if you were a German-Canadian and an active member of of the Deutscher Bund you could expect to be investigated and possibly interned. If you were German-Canadian and not politically active, you were largely left alone. Yet, if you were Japanese living on the the West coast--regardless of your political affiliation--you were interned as a matter of your race alone. It is interesting that the treatment of the Japanese in the Second World War imitates the treatment of Germans during the first, where wholesale internment was the norm.

At some points there have been some individuals who have claimed that German and Italian-American were interned, Holian for example. But the evidence he uses is faulty and the language he uses is confusing (intentionally referring to German legal residents as German-Americans even though they did not have American citizenship). Mostly, those that were German or Italian who were interned were not yet American citizens but rather legal alien residents and some of their children. At most it was arounnd 10,000 total compared to the over 120,000 thousand Japanese-Americans who were interned.

Source: The German-Americans and World War II: An Ethnic Experience by Timothy J. Holian; Don Heinrich Tolzmann; German-Americans in the World Wars. Vol. 4, the World War Two Experience: The Internment of German-Americans by Don Heinrich Tolzmann Review by: Jeffrey L. Sammons

Because the German-American population was far too large and too integrated within the white society for interment. German-Americans were white Americans, and it was not as popular for whites to round up fellow whites as with whites rounding up on those who had different facial features than them. So the Japanese-Americans, who were already considered to unworthy to be true Americans at the time, were the easy targets and were considered to non-Japanese American citizens to be the enemy, as many felt Japanese agents would blend in the Japanese-American population to conduct their sabotage and espionage missions on America's vital targets.

How much did the Ni'ihau Incident influence the decision to intern the Japanese people?

Surprised no one mentioned this. One of the reasons mentioned by advisers to FDR in the lead up to the interment was that it was difficult to tell Japanese people apart, so it would be harder to spy on them if there were saboteurs, whereas German and Italians were did not have that problem (i.e. Asians all look the same).

Can provide source if desired.

Recent German immigrants did face a great deal of discrimination in the run-up to World War II, much of it lingering sentiments from WWI: see Timothy Egan's "The Worst Hard Time" about the Dust Bowl, which spends a significant amount of time on Russian Jewish and German settlers in the region. Interning them would have been a whole different animal, though, as you're talking about an ethnicity that made up entire communities from Texas all the way through the Midwest.

You could also make the argument that Pearl Harbor is itself the reason, as America initially got into the war specifically to fight the Japanese, not the Germans. Think of anti-Arab discrimination after 9/11.