The same tale is told all over the world, where modern European civilization collided with traditional cultures. Indeed, the fact that you are now typing and probably thinking in English means that some form of compromise with modernity was eventually achieved, but not without much growing pains and casualties along the way. The idea that in Germany it could have been resisted entirely by not giving in to any of modernity's temptations is nice, but it would have resulted in a handful of hardline rabbis without a flock, as such a position would not have taken into account the realities and tempermants of German Jews, who were indeed ready for and on the cusp of speaking in German and the like. They were, in fact, chaleshing for it, and it would have happened with or without Mendelssohn, only perhaps without him it would have taken on the form of total apostasy. Or not; I could be wrong. But the point is that modernity itself was a powerful force seducing away from traditional religion.
Could a Lubavitcher have the perspective to sit back and realize, "it wasn't Mendelssohn it was modernity?" For them, the Rebbe said it, no matter how based in polemical distortions of a century earlier, therefore it's gospel truth. Literally. Because their Rebbes are Tzaddikim as described by the Tanya, and thus embody God's will in this world.
The anonymous commenter in the previous post cannot admit the Rebbe was wrong in attributing "Jew in the home, man in the street" to a man who lived his life as "Jew in the home, Jew in the street, Jew in the courts of kings and scholars." There is a letter where Mendelssohn notes that he had to refuse the wine of a nobleman because of stam yeinam. He wrote "Jerusalem" to defend the Jews in the public sphere. He wrote peirushim on the Chumash and the Rambam to make Judaism remain palatable to those affected by modernity.
(Well, there's some debate as to what extent that was the motivation for the German translation, and to what extent he wanted the Jews to be able to speak clear German, as they were already moving into outer society. There are two letters with contradictory ideas: that he wanted to make the Torah palatable to Germanized Jews, and that he wanted to make German palatable to Torah Jews. In either case, he did want to make sure that Torah remained compatible with Germanized Judaism.)
There is a commenter on some of the J-blogs, whom I know IRL. He lives entirely in the modern world, doesn't consider himself a chasid Chabad, but cannot escape the attitudes and ideas about history and relationships among Jewish groups inculcated by his Lubavitch upbringing.
This is hardly an issue limited to Lubavitchers, of course. I took a course on Islam in college, taught by a Muslim academic. He had no end of frustration with the orthodox Muslim students in his class (he was one himself). He required the students to step back and be able to look at Islam and its history as an outsider, without the prejudices of the believer. The students should be able to step out of themselves, but these students, for the most part, could not.
It may be easier for me, having been an outsider all my life. I was raised non0bservant, although my parents have since grown in observance as well. But they sent me to Ramaz, and we went to Lincoln Square Synagogue, because R' Riskin was more accepting of children than R' Miller at the SAJ, where we had been until 1973 or so. So wherever I go in the Jewish world, it's with the experience of not having come to it natively.
