Would a captain really know this?
I don't think every army captain would have know this, but Nixon wasn't like every army captain. When Winters met him at OCS in 1942, it was immediately apparent to him Nixon was a "world traveler" and "far more educated" than most members of their class.
It's not surprising Easy Company members like Nixon - or Webster, for that matter - were aware of Berchtesgaden's place in the history of National Socialism; they were uncommonly smart guys. But I do believe the line of dialogue served a dual purpose; as you've suggested, it explained to the audience what Berchtesgarden was and what it represented.
And it's worth noting the people of Berchtesgaden today feel that Nixon's description of the town as a place where you "had to be a Nazi" applied more to the Obersalzberg area.
In a 1995 interview with the New York Times, the mayor of Berchtesgaden stated: "Nothing terrible happened here. This was only a place where the bandits came for vacation."
However, the article goes on to say -
It was at Obersalzberg, however, where Hitler finished "Mein Kampf" and where he received state visitors like Mussolini and Chamberlain. Here he lived for months at a time without visiting Berlin, even while World War II was raging. Here his closest aides -- Bormann, Goebbels, Goring and Speer -- lived alongside him on property seized from intimidated residents.
"My greatest plans were all made at Obersalzberg," Hitler said in a 1942 radio broadcast.
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