> Which I find pretty concerning. "Don't say anything nasty about the state or the police, or we will shut you down" Isn't a message I was expecting to hear from a European Government.

If you look at the legal basis they used, you will find that the organization was actually banned as (inter alia) being a criminal conspiracy with the goal of facilitating the commission of criminal offenses (and in particular, violent crimes). Searches found knives, truncheons, and other weapons [1].

[1] http://www.n-tv.de/politik/De-Maiziere-verbietet-linksunten-... (in German).