Bayonets have been standard parts of infantrymen's kits since the 17th century. They were indeed intended for hand-to-hand combat, especially in the days of single-shot muzzle loaders when it was handy to have your rifle double as a spear on short notice. During WWI, some soldiers preferred to use their bayonets as knives for trench fighting, as the long rifle with bayonet attached was difficult to maneuver in the confines of a trench. A fixed bayonet was also a common sight on guards of POWs (from the American Civil War to WWII), and among soldiers sent to quell riots or keep the peace at demonstrations (like these soldiers at an anti-Vietnam War protest in 1967). Every army in WWII - American, British, Russian, Japanese, etc. - issued them to its troops. I'm not aware of anything special about Nazi bayonets, or their use.