I am saddened to think that you think the show has lost its power to affect audiences. In early 2017, I directed a production using the 1998 script/score but we approached the MC more in the Joel Grey style and eliminated the gas chamber ending. Instead of a mirror, we projected a live video of the audience on the cyc at the top and a few times throughout the show reacting to various songs, especially "If You Could See Her." At the end, Nazis came down the aisles as we showed the audience one last time, this time with the Nazis visible in the aisles.
The cumulative effect of the show was devastating and many audience members were stunned.
With regard to "Two Ladies" and decandance- the idea is to depict Berlin as a place where all who felt out of place could go. Germany was extremely conservative and Berlin was a magnet for artists, people of all sexual persuasions, etc. They were able to live freely there but many didn't take the rise of the Nazis seriously until it was too late. Open homosexuality was happening in Berlin. It's not there to say that the Nazis were justified. It's there to point out that in the club, you don't have to worry about the outside world. The moral of the show is "It can happen here." And that is true, as we're discovering with our current president.
The MC, in my view, knows what's happening but decides to appease the Nazis to keep the club open.
I'm not sure what problem you think needs to be solved.