This is mostly in the script and cut from the movie. Danny is an impressionable kid who follows Derek's lead. Henry, the black kid who Danny has a conflict with at school, was pressured into it by his big brother (who he seems to idolize). He's in the exact same position as Danny.
Murray being revealed as Jewish adds a new layer to his reaction to Danny's Mein Kampf essay at the beginning of the movie.
The entire cycle of hatred and violence in Derek's life was started when his hardworking albeit bigoted father was murdered by a black man while doing his job. Looking at the circumstances of Danny's death, what's stopping Derek from snapping right back into the mindset that made him such a notorious monster in the first place? It puts a whole new spin on Sweeney's question of "Has anything you've done made your life better?"
Danny shouldn't have died. It should've just ended with a Happy Ending with Derek and Danny turning over a new leaf, renouncing bigotry, and working to fight bigotry. The canon ending ruins the whole story and inadvertently reaffirms bigotry as the Misaimed Fandom can attest. Yes, Virginia; You can start a new life, you can break the cycle, there is redemption, there is hope.