The fact that Russia wants to imprison the athletes for being open about what they are is an affront to the games themselves. Hitler didn't even imprison Olympic athletes that didn't match with his views.
It is certainly true that the games were held in Nazi Germany. I don't know what pointing this out has to do with whether or not it can be morally wrong to hold the games in a country with a sufficient level of human rights abuses. Clearly my position is that holding them in Nazi Germany was morally wrong.
That organizers made bad choices in the past does not negate my position or diminish my point.
Considering Jesse Owens threw SERIOUS doubt on the Nazi precept of racial superiority.
Certain American athletes also chased Hitler from the Stadium once the Track and Field events started, and Hitler was informed by the IOC that he must receive ALL winners... or none.
Hitler chose to receive none.
After the first day... seeing how things were going... he no longer attended the stadium.
Speaking of transcending political intentions, there's a story from those olympics where German long jumper Luz Long gave Jesse Owens tips to help him qualify for the event. There are countless other gestures that demonstrate the same spirit at that event.