You might want to re-read your argument here. You certainly didn't do yourself any favours. Whilst I don't condone nor agree with Neo Nazis you can't discriminate against someone because of a belief. Swap your people around: You have a bar owner who is not religious and a Hindu comes in orders a drink, he's keeping to himself, no problems. A day or two later he comes in with another Hindu buddy, they have a few drinks and leave, a week goes by and you've got a bar full of Hindus.. Oh dear, you're a Hindu bar and no one else wants to visit.
Back to your Neo Nazi... You ask him to leave politely "Hey buddy, drinks on the house, but I need you to move on, we don't want you around here, it makes the other patrons uncomfortable." He finishes his drink and leaves quietly. Next thing you're getting a letter from him, he's a lawyer and you're being charged with discrimination.
I have nothing against moderation, and extreme content should be removed and people should be restricted in using public utilities if they pose a problem or a threat, but just because you find "KillNi**ers" offensive doesn't mean everyone will. Disgusting, yes, offensive to me, no. Would you be just as upset with a Mii called "AllWhitesAreEvil" ?
Back on topic.
Blocking users should actually be an easier implement. Netpass already has a config file, it'd be much easier to add the offensive 3DS MAC address to the config file (or even a separate blocklist file) and when downloading data from the Netpass server, this is checked against the block list, and any messages from a blocked 3DS is deleted before being merged into the CECD file. No need for server side checks putting less strain on the server and not putting soru in the potential political firing line.