Israel's Law of Return based on Nuremberg Laws?

It is often said that Israel's Law of Return, allowing anyone with one Jewish grandparent automatic citizenship, is based on Nazi Germany's Nuremberg Laws segregating Jews from "aryans." This misses the point in a couple of crucial aspects. When the law was first passed in 1950 it was for any Jew. It wasn't until 1970 that the law was changed to allow for the one grandparent principle. I don't know the circumstances leading to the change but Israel seems to move the who-is-a-Jew goalposts every few years to satisfy its "demographic concerns." Now, let's have a look at what Wikipedia has to say on this:

The Law of Return does not actually assert citizenship based on Jewish identity, but rather attempts to provide sanctuary as a citizen in Israel to anyone who would be persecuted under the Nuremberg Laws. As the Nuremberg Laws did not use a halakhic definition in its definition of Who is a Jew, so too the Law of Return definition for citizenship eligibility is also non-halakhic. The Law of Return merely provides citizenship for anyone covered under the Nuremberg Laws, but does not cede Jewish status to those granted citizenship. Thus one can be Jewish and be excluded from Israeli citizenship under the Law of Return (e.g. Meyer Lansky or Brother Daniel) or not be Jewish and yet be granted citizenship (but not Jewish status).

This is both mealy mouthed and self-contradictory. See the case of Brother Daniel which is mentioned in the passage.

Oswald Rufeisen 1922-1998, also known as Brother Daniel was born to a Jewish family living in Poland, near Oświęcim. To escape Nazi persecution, he hid in a monastary for over a year; during this time he decided to convert to Catholicism. In 1945, after the war, Rufeisen returned to Poland, converted, studied for the priesthood, and became a Carmelite monk.

In the 1950s, Rufeisen applied for Israeli citizenship under the Law of Return, which provides Jews (and other) with Israeli citizenship through a streamlined naturalisation process (e.g. without the requirement of several years residency).

The Israeli government denied his request, on the grounds that he had converted to Christianity. Rufeisen appealed the case to the Supreme Court of Israel, and in 1962 the Court upheld the government's decision: any Jew converting to another religion would lose their preferential access to Israeli citizeship. (Rufeisen v Minister of the Interior, (1962) 16 PD 2428)

The case of Meyer Lansky is a straightforward case of Israel refusing citizenship to someone because of the welfare of the state. In this instance America was pursuing Lansky for racketeering and threatened to withhold Phantom jets from Israel unless Israel denied Lansky the right to remain. The case of Brother Daniel, formerly known as Oswald Rufeisen, is not so straightforward. Regardless of his conversion to Christianity, Brother Daniel would clearly have fallen foul of the Nuremberg Laws. Far from being a bulwark against Nuremberg style laws, the Law of Return, taken together with the Absentee Property Law, replicates them to an extent, except of course, the Nuremberg Laws were based on the pseudo-science of "race" and the Law of Return, together with the Absentee Property Law combines religious background with ethnicity. It is no less racist for the absence of "biological determinism" from its intention and application.

Also posted at Lenin's Tomb