I don't think they did not want to do anything or turned their backs but they were caught off guard and this was pretty much an unprecedented attack ..just as 9/11 was to the the US.
German/Olympic authorities probably figured the hostages would be unharmed if demands would be met.
They might have been right about that, too. I was too young to remember the 1972 "Black September" terrorist attack in Munich, but I will say that it wasn't until decades later that I read the details of the incident and learned that most of the casualties would most accurately described as victims of a botched rescue operation.
In defense of both the Israeli and German officials (and the Olympic officials as well), dealing with this type of incident would have been absolutely confusing even under the best of circumstances. When you have terrorists with no known national affiliation acting in Country A, taking hostages who are citizens of Country B, and demanding safe passage for other prisoners in Country C, there is bound to be a lot of diplomatic and legal wrangling behind the scenes that will ultimately impede the response.
I'm sure Olympic officials and governments of host countries are much better prepared for this sort of thing now, but nobody is ever prepared the first time something like this happens. See 9/11 as Exhibit A on this one.
BS! They were GERMANS. It hadn't really been that many years since the holocaust. What makes you think they gave a shit about a handful of Jews?
I remember watching that as a kid, and my father pointing out the total lack of concern and ineptness on full display. All the krauts did was watch.