Does religion tend to make people better or worse?

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It keeps people from becoming tankies or Randians.

one could argue that Stalinism (and Maoism etc) and Objectivism are religions in themselves.

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the Nazis viewed the freethinker leagues and the Christian Churches with the same amount as suspicion (although the relative lack of power of the former meant that they didn't have to play around with turning the screws or setting up puppet orgs): they were both sources of potential deviancy from Nazi idealogy. Although some like Bormann would have probably quite liked to see the entire religion obliterated, I assume that if the Nazis would have been in power there would still be a Christian Church (or, more to the point, something calling itself the Christian Church, much like there was something calling itself a trade union under Nazi Rule) just one vetted and controlled by the State. There was a healthy amount of collabaration, iirc - at one point I'm pretty sure the Nazi-aligned German Church tried to make a new Bible "de-Judeaised". Same with atheism: it was all very well to call yourself an atheist, but to be too associated with related philosphies like humanism or materialism was marking yourself as somebody who marched to their own drum.

Really the strangest thing about the Nazis was how obsessed most of the leaders were with mystic woo, bizare pantheism, neo-paganistic weirdness, occultism etc.