Kotaku reports Pewdiepie is stopping with the Nazi jokes because he now realizes they're not funny. They provide cover for real Nazis and make it appear as though he stands with them. Here's part of what he said:
“At this point, I’d really just want to distance myself from all of this,” Kjellberg said. “I remember back when everything happened in February, I was sort of like, ‘I mean, they’re just jokes. There’s not actual Nazis out there, what are you talking about?’ And then I look at this, and I’m like oh, I see. OK!”“So I thought now would be a good time as any to say, I want nothing to do with these people,” Kjellberg said. “I don’t think anyone that watches me think I’m an actual Nazi, but I know that some people might have some doubts, mainly because of all the jokes that I’ve been making.”
Others say Nazi jokes shouldn't be off limits because nothing should be. They're just jokes. They're not meant to be taken seriously.
In the past, Pewdiepie and his fans defended the Nazi jokes by saying they're part of his absurdist humor, which tries to poke fun at the breathless reaction towards Nazi jokes. It's just trolling and it's all done in good fun. Plenty of people joke about Nazis—South Park has done it.
Dark and edgy humor has always been a mainstay of the Internet. Don't let assholes and white supremacists take that away.
It's true that a certain kind of bullying—the anti-Semitic, pro-Trump, alt-right kind—is more noticeable than it was before. We probably shouldn't discount the possible political implications of this. It would be wrong, of course, to pretend that white nationalism isn't making any sort of comeback. But we also shouldn't pretend that the kids are doomed because they currently prefer a different kind of sick humor than they used to. Again, teenagers were always laughing at incredibly inappropriate things—that thing just happens to be PewDiePie's awful jokes, at the moment.