I've heard that this is because he felt Latin culture/ people were not Aryan or lower on the superiority list than Germanic people but then wouldn't this also take out the possibility of the HRE being a reich as it was modelled and created as the 'New Roman Empire'
Although both Charlemagne and Otto I styled their Holy Roman Empires on the Roman Empire, they both achieved that title through military campaigns which brought Rome under their control, Charlemagne in 800 and Otto in 962 respectively. Otto's HRE, the one which would survive until Napoleon, was intrinsically German, stemming ultimately from Otto's - and his father Henry's - original position as Duke of Saxony. Although it stylised itself with Roman Imperial pretensions, the HRE was culturally and politically German, and laid the foundations for the eighteenth and nineteenth century German nationalists such as Stein whose philosophy would eventually underpin Bismark's "Second Reich".
It was this Germano-centric power which Hitler sought to emulate with his "Third Reich" - a specifically German empire at the heart of Europe, both politically and culturally dominant. In comparisson, the actual Roman Empire had been a foreign culture (partially) imposed on the Germanic peoples, and while its power, authority and structures were to be aspired to, its culture was not also desired. The actual terminology of a "Third Reich" was invented in the 1920s by Arthur Moeller van den Bruck, and later adopted by the Nazis, and he thought in terms of specifically German empires. That the Holy Roman Empire envisioned itself as the successor of Rome is unlikely to have mattered much in the face of the useful propaganda value of a strong, Germanic empire.
Lauryssens (1999), The Man Who Invented the Third Reich: The Life and Times of Arthur Moeller van den Bruck
Bachrach (2009), "Exercise of royal power in early medieval Europe: the case of Otto the Great 936–73", Early Medieval Europe 17 (4): 389–419
Wilson (1999), The Holy Roman Empire, 1495–1806
Zamoyski (2007), Rites of Peace: The Fall of Napoleon and the Congress of Vienna