This is an interesting question. I'll try to answer as best as I can, and Reegar, I'd like to hear your take, too.
okay,
Can you morally condemn the holocaust, and, if so, on what grounds?
You're asking me if I think genocide is bad. I'll tell you, I think murder is bad, genocide is horrific. On what grounds? Well, I wouldn't kill anybody. The "Do unto others" rule, doesn't only exist in Christianity and probably 99% of other religions in the world (look it up). It's plain common sense, dictated by self preservation, killing people is "bad" because it would be detrimental to the survival of the species.
Of course the death of six million Jews is bad. And the death of all the gypsies and homosexuals that the Nazis rounded up, too. And the death of millions of Russian soldiers. And German soldiers, and American soldiers, and Japanese soldiers.
I'm sad that all these people had to die, for one reason or another. The ideological backing behind the Holocaust, though, is what makes it even more insufferable. The mere thought that these people had to suffer, be separated from their families, starve, die, just because Germany had lost the war and was in an economic crisis and needed a scapegoat, is incredibly saddening.
However, you can look at the good that came from the bad. If it weren't for Schicklgruber, Von Braun wouldn't have left Germany, and maybe a German or Russian cosmonaut would've walked on the Moon. I like to think that WWII, while a horrible scar in humanity's past, has brought life to endless material for comedians, whole generations of them. Some have based their entire career on it!
I'll make another example that will, no doubt, make every American cringe. We all know lots of people died on 11 Sept 2001. We all feel bad about it. But maybe (to quote comedian Louis C.K.) there were a couple of assholes that day, on the towers. We don't know for sure, but statistically we can assume at least one person saw the buildings collapse, and sighed with relief, because somebody they had a beef with, was in the middle of that disaster.
The usual idea is that, without some sort of ultimate authority, there's no way to absolutely say that something is bad.
Well, turns out there is no ultimate authority, in every sense. What was good once, may not fly today. In other words, humanity will make its own rules. If everybody agrees killing each other is good, well, guess what, it's good. But until further notice, it's bad.
I feel like I rambled. Did that answer your question?