Most likely Hitler and the degenerates around him would simply be executed. There's always going to be scum being scum, the economic system doesn't make perfect societies.
It's pretty much confirmed though that Hitler was rejected because he wasn't a Jew. Admissions into any educational institution always involve the preferences of the administration, and they have pretty clear ideas of who they want and who they don't. It's the same in any system.
Hitler probably was the way he was because of his crappy home life, probably a genetic predisposition towards insanity, and the overwhelming attitudes of Germans at the time. (If not Hitler, then it would have been someone. Dude was bankrolled by big players in American and British finance specifically for the sake of anticommunism, and there's no way that money doesn't translate into street muscle. They could have found another degenerate like Rohm if they needed to, and Hitler wasn't even the most evil or craziest shitlord in the Nazi Party.)