My feeling also says that a certain quality of the remaining life is more important and humane than a permanent medical treatment that would make her life unbearable, if this is the case. Of course, you also have to check the legal side of the matter; I assume in Germany one would not even have the right to reject the dialysis, a lot of discussions about these issues are ongoing here.

I found some German-language medical studies that reveal that obviously a lot of German patients with dementia receive dialysis, and it is emphasized how difficult this often is also for the medical staff.

This is one link, unfortunately in German, I'm adding the abstract in English.

I would recommend you to collect and evaluate all expert assessments you can find, and than make your decision with a clear conscience - that's all that can be asked of you.

http://www.afnp.de/dokumente/pflegepreis/2008/Kollmeier.pdf

"Demented patients on dialysis – A challenge
for the nephrological nursing staff
Against the background of the changing demographic
situation, the introduction of the
nursing care reform in 2007 has been followed
by an increase in public interest, in particular
in dementia. The growing trend towards ever
increasing numbers of demented patients is
also to be observed in nephrological nursing.
The case of a patient of the dialysis centre in
Bad Tölz serves as a basis for a discussion on
how the treatment of such patients might be
standardised and improved. The most important
of the proposed solutions is the provision
of nursing care consistency and the introduction
of a “personal nurse” model."