I'm guessing that whatever money gets dragged in by the ad clicks on Downfall parodies it isn't nearly enough to pay for a major copyright case.

But it's not just the downfall parodies, it's all parodies they'd be making a stand for.

Youtube should be willing to make a stand on this, clearly these have cultural value, and to lose them is a real pity.

Not really, it's a small subset of parodies. The parody defence is well enshrined in law in most justisdictions but it's a genuine legal question whether it applies in this case. IANAL but this parody is stretching the definition since:

a) It uses a not-insignificant slice of the original film (an entire scene, four minutes long iirc)

b) It changes nothing from the original except to add some subtitles. (Note that this means that someone who spoke German but not English would not be able to distinguish between this scene and an English-subtitled version of the original film)

c) Possibly the kicker: the target of the parody is not the film being copied. People making these videos aren't aiming to make fun of Der Untergang (which many of them have probably never seen), they're aiming to make fun of Xbox Live, or Apple, or Star Trek, or whatever. Wikipedia on "Parody" says:

"The Supreme Court of the United States stated that parody "is the use of some elements of a prior author's composition to create a new one that, at least in part, comments on that author's works.""

so you'd have to argue that the edits were intended as a commentary on Der Untergang, which seems iffy to me.

I think it parodies Hitler, not the movie.

Also, the movie was produced by a German company, so I think the Berne convention on copyright is what applies here, not the US supreme court, but I'm not quite sure, after all Youtube is an American company. The Berne convention does not mention 'fair use' or parody at all.

Regarding point "b)", I think you made your own point against yourself already: for most people, the scene is 100% different since they don't understand German. If I were to make a parody where I changed the words, I don't think it would be a valid argument to say "but for deaf people the scene is exactly the same!". Similarly, keeping the music and doing drastic changes to the visual you could argue "but to blind people its exactly the same!".

For most people the scene is the same since they don't understand German or English.

In any case my point about German speakers was subsidiary to my actual point: it's quite a small change to the original.