I don't know if it's the reason you imply. In the 70s, there were big debates in Germany about privacy and data storage. They spoke of one's data shadow (Datenschatten). I suspect this word comes from that tradition. The reason the word exists would then be the reflection (Verwaltigung) on WW2.
But yes. We Americans know Germans more for their silly big words. But statements like that can be misinterpreted as the German perspective of themselves doesn't quite match the American stereotypes.
- we learned the hard way that data will be used to kill people, during the Nazi regime
- we learned it again in the GDR with the Stasi being a little less obvious but still ruining people's livelihoods
- and German comes up with compound words for such things
E.g. you don't think of firefighter as fire-fighter in ordinary usage.
In the US of course the government buys this sort of information legally from corporations.
There is also the rather famous example of how earlier census data was used in the 40’s.
Once the government has your data, they have it. The next generation of representatives may not follow all the same rules and norms
So yeah, of course they've developed that type of distrust. Americans should have also after the 50-60s paranoia of red scare, black people etc. Instead they just spend a few decades building a anti-social state.
Who doesn’t want that old post going extinct forever when they were shit faced outside of a bar in Nashville but now they are in their mid-life and are “respectable” members of society.
is not a word -- I think you mean Vergangenheitsbewältigung?
https://en.wikipedia.org/wiki/Vergangenheitsbew%C3%A4ltigung