Local resistance to extremist rhetoric and violence is what's possible for individual people to do on a daily basis. Showing up to counterprotest takes courage, and if the counterprotest hadn't happened, that would have been tacit acceptance of the KKK/Neo-nazi presence as being legitimate. The KKK was defanged during the Civil Rights era by mass movements and legal efforts. Both are needed, since legal efforts without popular support lead to continued radicalism, whereas popular movements without legal support can be ineffectual in developed societies.
You say it's better to have their protests peacefully and engage in discourse, but that assumes that all opinions are equally respectable, and all actors act in good faith. This is obviously not the case.