Philip K. Dick first came up with the idea for his novel 'Do Androids Dream of Electric Sheep?' in 1962, when researching 'The Man in the High Castle' which deals with the Nazis conquering the planet in the 1940s. Dick had been granted access to archived World War II Gestapo documents in the University of California at Berkley, and had come across diaries written by S.S. men stationed in Poland, which he found almost unreadable in their casual cruelty and lack of human empathy. One sentence in particular troubled him: "We are kept awake at night by the cries of starving children." Dick was so horrified by this sentence that he reasoned there was obviously something wrong with the man who wrote it. This led him to hypothesize that Nazism in general was a defective group mind, a mind so emotionally flawed that the word human could not be applied to them; their lack of empathy was so pronounced that Dick reasoned they couldn't be referred to as human beings, even though their outward appearance seemed to indicate that they were human. The novel sprang from this. [From the IMDB "trivia" on "Blade Runner".]
Remember-- Arendt believed Eichmann when he claimed he did not personally intend to send tens of thousands of Jews to their deaths. He was, infamously, just following orders.
As were these SS men in Poland. Disturbed from their beauty rest by the cries of starving children.
Arendt would, I believe, declare that these men were not "evil" in the sense we usually think of it. They were just following orders. They were parts of a system that produced an evil result.
And again, I think she is right in the sense that these men are average. They are human. They behave the way most people behave. The difference is, Arendt doesn't think that this character should be thought of as "evil". It's a deficiency in character. They haven't self-actualized. They don't experience empathy.
They obviously can't see things from the perspective of the starving children.