The difference is the ideas a person believes in. Ideas matter.

The German NAZI regime perpetrated a great deal of evil. At least, that's the broad consensus of modern human beings who either witnessed it, or know about it. That evil was not the result of the government of Germany being taken over by a bunch of mentally ill people. The NAZIs weren't basically mentally ill. They adhered to ideas that humanity in general finds evil. At least, most people in the world have judged those ideas to be evil. There are a minority of people who think the NAZIs were right. They belong to organizations that promote NAZI ideology. These aren't gatherings of mentally ill people. These are adherents to a way of thinking, based on a system of ideas. Most people find those ideas abhorrent.

Serial killers and mass murderers justify what they do through the ideas they hold. Ex: "If I'm unhappy, then other people should be unhappy. I want other people to feel a great deal of pain. I have a right to do that." Those are ideas.

The difference is in the ideas that people hold.