That's interesting, and despite knowing the difference between the concepts of Mitteleuropa/Lebensraum, I had never learned of this particular aspect of his thought. Settling conquered lands is indeed better in the long run than mere imperial administration, even though imperialism may be more profitable in a short timespan. But some things are more important than money, something neither liberals nor socialists can grasp.
But curiously enough, Uncle Adolf built a de facto sphere of influence/indirect empire over lands such as Slovakia, Vichy France and the Salo Republic, and greater levels of autonomy and collaboration with Eastern European subjects were pretty much guaranteed to happen in the decades following a successful Soviet campaign for the practical difficulties that any attempt to displace such a large area's population and settle it would face.
Furthermore, his autistic insistence on racial purity and not
assimilating subjugated peoples is puzzling, given that assimilation and miscigenation were precisely how the Ostsiedlung managed to Germanize large areas, leaving major Slavic genetic traces in Eastern German populations that last to the present day.