He was 12 when the Nazis came to power. Changes the conversation considerably. No one can stand here and say, with complete confidence, they'd be different from him. How much can you blame someone for being raised to believe terrible things, and then continuing on as a young adult?
It doesn't absolve him from his crimes, but we aren't talking about normal circumstances. This is clearly someone who, as an adult, changed his mind, and admitted wrong. It's 70 years later now. It's not yesterday. Maybe if he was older than 12, and had complete agency over his actions, we could talk about this differently. Until then, I think, it's not worth punishing him, again, after all these years.
This does nothing good, and no one can give a concrete reason as to why it would be good, without some vague use of the word "justice" or "lesson." How about something tangible? In every way, this sounds like, "We want to punish someone to make us feel better" rather than to actually accomplish anything. I don't think that is a good reason to lock someone up. That's a very serious thing to do. Prison shouldn't be the go to answer for anything ideological. Stripping others of their natural rights shouldn't come as easy as, "it will make everyone feel better."
I mean you said it yourself, it doesn't absolve him of his crimes. Holocaust deniers will exist and continue to spout their bullshit with or without a few letters or phone calls from Herr Groning.
Also I vehemently reject the "he was young, any one of us could've ended up in the same situation". No. He willingly joined the SS and approved of the Final Solution. If he was on record all these years since the war saying he had no idea what was happening in the camps or that when he found out he wanted nothing to do with the Nazis ever again (and there was proof of this), then it would be a different story.
He's been honest after the war, which is one good thing you can say about him.