Maybe it and the anti-semitism it represents were that institutionalized in Europe long before the nazis; Hitler wouldn't have proposed the "final solution" to "the Jewish question" if a lot of people hadn't been asking it for centuries. I was certainly aware that the charge had been around a very long time; it was popular with the Inquisition, too, IIRC, but I didn't think that, prior to Hitler, it had credence with such huge chunks of whole countries as in Nazi Germany. It's certainly ironic though, in a nauseatingly ignorant or disingenous way, that the American far right would trot it out though. Whether it's calculated obtuseness or genuine ignorance it's still pathetic, and not in the way they wish.

As to reaction by Americans of Jewish ethnicity, Wikipedia says this, which answers your question and the literal aspects of Camillas:

So, yeah, not only is Palin effectively accusing one of the shooting victims of RETROACTIVE "blood libel", but the victim in question happens to be a Jew. If you look up "shameless" in the dictionary guess whose picture is there.... And before any wiseass says it, Godwins Law only makes it inevitable without deciding anything. More importantly, insisting others are guilty of "blood libel" introduces anti-semitism and thus nazis as a topic, and anyone who doesn't KNOW that probably shouldn't use the term.