It's conceivable that those laws were a mistake. As I understand it, in the 1950s and 60s Germany went into a very psychologically "wounded" state, in which a generation felt unable to face the past.
Since speaking about it was verboten, the children of that generation had no ground truth, nor any forum in which to seek one, and they were shut down whenever they raised questions.
As a result paranoid currents began circulating in the culture of the 70s leading to Baader-Meinhof's Red Army Faction and other outspilling of unresolved guilt, accusation and anger. Of course it's a textbook case of what Freud would have named "repression".
> How do we square that with the notion that laws against hate speech are a retreat from rationality?
If you accept the premise of necessary of openness and public legibility then it doesn't need squaring. It is the essence of rationality, albeit uncomfortable and costly. So long as apples and oranges are not confused. One responds to speech with speech and to actions with actions.
Unfortunately we live in an age best describes as "psychotic" - one strong definition of which is the inability to distinguish reality from fantasy. Technology plays a major part in this split.
We also suffer a highly asymmetrical information-scape in which response to ugly ideas is not always possible. Again this is ironically exacerbated by technology that promised to ameliorate the problem by "connecting us all".
In any case, the healthy mind does not mistake expressed feelings, wishes and fantasies or even blustering statements of "intent" (eg. "I'm going to f*king kill my mother in law") from actual reality and actions in the world. In this state of "sanity", free from fear, one is able to engage in reasonable disputation.
