Problem is, the German Verfassungsschutz (lit. "Federal Office for the Protection of the Constitution", the domestic intelligence agency) was itself infiltrated by the far-right [0] and so didn't ring the alarm in time.
I agree with you that there's probably no way to come out unscathed from trying to ban them now - their followers are already radicalized and it probably wouldn't be pretty. But that being said, what else should we do? Just do nothing and let it all happen once more? Break our promise of never again? Watch history repeat itself? No - we have to at least try.