At the risk of reviving a thread that may have been better left to die in peace, YANBU OP but I am also not surprised.
This is definitely not a joke. It is meant as we would take it. Egypt is horribly anti Semitic (I find this word strange though, as Egyptians, or at least Arabs are themselves a Semitic people) and there is a complete inability and unwillingness to distinguish between the actions of Israel as a state and Jews in general. It is really sad given the long history of Judaism in Egypt and the huge contribution that Jews have made to Egyptian society over the course of millennia. Egyptian Christians IME are just as bad as Egyptian Muslims in this respect. Pretty much the only exceptions are made for stars who renounced Judaism for political reasons, like Leila Mourad.
While not an excuse, there are some factors behind this. Firstly is the fact that hardly any Egyptians under the age of seventy have met any Jewish people except in the context of war or espionage. There has been a consistent interest on the part of the state to maintain the narrative of Jews as the enemy and this ignorance and hatred is the predictable result. Even intellectuals by and large subscribe to this view and support a complete cultural boycott of Israel and the Hebrew language as a way of upholding solidarity with the Palestinians and pan Arab brotherhood. So long as the Palestinians don't try and settle here, that is.
Secondly I don't believe that the Holocaust has ever been taught in schools. I have met people with PhDs who had never heard of it or believed that it was a Zionist conspiracy perpetrated by Jews themselves to claim the Holy Land.
I have heard this repeated on TV more than once, and whilst patently offensive and untrue, it is sadly not the most ridiculous conspiracy theory doing the rounds. Conspiracy theories here are an essential component of state power.
I have never seen the product in question for sale, but it isn't at all surprising that it exists. You just have to look around at the prevalence of swastika graffiti.