The flashback in chapter 8 describes a Christmas play that Bruno’s grandmother had Bruno and Gretel perform. Bruno thinks of the play because he is missing his grandmother and grandfather. His memory demonstrates how unhappy he is, and how thinking back to happier times does not comfort him because he remembers when things started going downhill. Ralf wearing his Nazi uniform offends grandma.
The author includes this flashback to show how politics can destroy families. In Nazi Germany, not every German gladly followed Hitler. There were many people who disagreed with his policies and how the country was being run. Sometimes this could cause a rift in a previously happy family. World War II and Nazism tore Germany apart.
The answer is that to show conflict in the story and foreshadowing what is going to happen in the future. Thus the main points of the flash back in chapter 8 is to foreshadow the future and show conflict in the family of Bruno.