God allows people to make their own decisions, whether they are right or wrong. Though a specific even may be absolutely horrible, God's ultimate plan that spans all of history is perfect. "All things work together for those who love God, to those who are called according to his purpose". Some people are chosen for salvation (a "remnant"), while the rest are chosen for unrighteousness and destruction. God does not cause people to sin, but He does allow it, and will continue to allow it until the return of Christ and the judgement. You cannot accuse God of unrighteousness; only He has the perfect will and knowledge to see and shape the awesome story of humanity. The great truth and mystery is that God chooses anyone to save, because we are all equally deserving of death and hell, every last one of us, because all have sinned and fall short of the glory of God. It is only by the grace and love of God that anyone is saved.
As for the holocaust in particular, all I can say is that when it comes to the nation of Israel, God has often used tragic events in order to bring them back to Him. Whether that was His purpose in the holocaust, I cannot say, but the enslavement of His people in Egypt, the captivity in Babylon, and many other instances in the Bible were used by God in order to redeem the Israelites from sin. They repeatedly disobeyed God and turned to sinful pleasures and false gods. Half the time they brought themselves to the brink of destruction because of their sins as a nation, but God (always the loving Father) always intervened and saved them. That is why Israel has survived as a people all these thousands of years, longer than any other culture or people. God is glorified through the nation of Israel, which was and is His chosen people, the firstfruits by which us Gentiles could also be saved, and He will not let them be utterly destroyed.
There are more persecutions and times of great despair for the nation of Israel that will come, most notably during the end times, in which Israel will see its greatest revival as the chosen people of God among the nations, and in those days they will teach and proclaim the truth that Christ is the Messiah who came in this world to save us from sin and death. It is often through perilous times that people turn from pride and sin and cry out for God, and during the end times there will be many (millions, possibly over a billion) from Israel and throughout the world that will be saved.
" What shall we say then? Is there unrighteousness with God? Certainly not! For He says to Moses, ?I will have mercy on whomever I will have mercy, and I will have compassion on whomever I will have compassion.? So then it is not of him who wills, nor of him who runs, but of God who shows mercy. For the Scripture says to the Pharaoh, ?For this very purpose I have raised you up, that I may show My power in you, and that My name may be declared in all the earth.?Therefore He has mercy on whom He wills, and whom He wills He hardens.
You will say to me then, ?Why does He still find fault? For who has resisted His will?? But indeed, O man, who are you to reply against God? Will the thing formed say to him who formed it, ?Why have you made me like this?? Does not the potter have power over the clay, from the same lump to make one vessel for honor and another for dishonor?
What if God, wanting to show His wrath and to make His power known, endured with much longsuffering the vessels of wrath prepared for destruction, and that He might make known the riches of His glory on the vessels of mercy, which He had prepared beforehand for glory, even us whom He called, not of the Jews only, but also of the Gentiles? " - Romans 9:14-24