Life under pan-european national socialism would have been no picnic either, you know.
The western allied powers weren't politically able to claim all of Europe when the Soviet Union had played such an instrumental part in defeating Nazi Germany. Insisting on it might well have led to more war, and that would truly have been ugly and quite possibly nuclear.
It was a very unfortunate outcome for eastern Europe as a whole, of which most had a considerably harder time than Hungary. The exception was, of course, the uprising in 1956. Had other eastern-bloc countries tried the same, they would have fared no better.
The unpleasant fact remains that, during the war, Hungary did help to deport a great many jews. It, like many other countries, had fascist tendencies at the time, and antisemitism/racism was widespread. It's still around today, mostly slumbering just beneath the surface.
In Hungary, it's currently the gypsy population that bears the brunt of it, but there is still also quite a bit of antisemitism.
Links for your perusal:
http://en.wikipedia.org/wiki/Hungari...ocialist_Party
http://en.wikipedia.org/wiki/Arrow_Cross_Party
and something much more recent (2007-2009):
http://en.wikipedia.org/wiki/Magyar_Garda
and some pictures of them:
http://cache.daylife.com/imageserve/...Xl13V/610x.jpg
http://www.spiegel.de/img/0,1020,952214,00.jpg
http://www.pinknews.co.uk/images/jobbik.jpg
and their backers, who are still a legitimate political party today:
http://en.wikipedia.org/wiki/Jobbik
http://thefastertimes.com/protofasci...__470x3580.jpg
http://cache.daylife.com/imageserve/...7Pgvp/610x.jpg
http://en.wikipedia.org/wiki/File:JobbikPlakat2009.jpg
(election poster featuring the slogan "Hungary belongs to Hungarians")