Reading over it... it seems Sadow launched an assault on the Republic to conquer it when he was outnumbered. He lost and retreated, he was exiled from Sith space by Kressh and had no real allies left.
Reading some more... the Supreme Chancellor then ordered the complete destruction of Sith civilization. The Jedi destroyed artifacts, teachings, temples, etc. one Jedi in particularly stripped and severed the connection many Sith had to the Force.
I think you were off when you likened the Sith to the Nazis in this case.
George Lucas used the Nazis as a model for the Empire in his writing