The problem I have with the idea of Blofeld being a Nazi collaborator is one of age. Even if he was a child during the Second World War, he would now be in his seventies, at least. More likely as an active collaborator in his eighties or nineties.
Franz Oberhauser is being portrayed by an actor in his late fifties. Had this character been around during, say, the Moore era then the Nazi link would be more credible.
I always envisaged a revised Blofeld as having a background similar to that in the novel Thunderball - a background in communications trafficking and espionage, but updated for our era. He may have been, for example, an intelligence officer for one of the Warsaw Pact nations who went private after the eastern bloc collapsed, sold his wares to the west, made a fortune and on the back of that - because with his work background he couldn't "kick the habit" - set up his own private intelligence, crime and terror syndicate dedicated to making money out of mayhem.