How did “gesundheit” work its way into common American usage?

Question

Once upon a time I was hanging out with a fairly international group of people. Somebody sneezed, and one of the Americans reflexively responded, "Gesundheit!"

A German in the group seized on the opportunity to ask, "How do all Americans know this word?" Apparently he had been puzzled for quite some time by the number of Americans who know one, and only one, word of his native tongue. Some of them don't even know that it is a German word!

None of us could come up with a satisfactory answer.

Answer 1

According to etymonline.com:

gesundheit 1914, from Ger. Gesundheit, lit. "health!" Also in toast auf ihre Gesundheit "to your health" (see sound (adj.)). Lith. aciu, echoic of the sound of a sneeze, has come to mean "good luck, God bless you." See also God.

The United States has a large population of German immigrants and heritage speakers. Take that into consideration, along with the fact that a lot of Americans spent a lot of time fighting in two World Wars in Germany, and that many military personel are still stationed there.

Answer 2

From Wikipedia:

In German, Gesundheit ([to your] "Health") is said after a sneeze. This is sometimes used in the United States. The expression arrived in America with early German immigrants, such as the Pennsylvania Dutch, and doubtless passed into local English usage in areas with substantial German-speaking populations.1 The expression is first widely attested in American English as of 1910, about the time when large numbers of Yiddish-speaking Ashkenazi Jews immigrated to the United States.

Why Do We Say Gesundheit After Someone Has Sneezed?

Answering the question of why North Americans use ‘gesundheit’ post-sneeze also requires us to go back in time though not nearly as far as the days of Pope Gregory and the bubonic plague. The after sneeze use of ‘gesundheit’ can be attributed to German and Yiddish speaking immigrants entering the United States and other parts of North America in the early twentieth century. Like many phrases used prominently now in North American English gesundheit came from humble immigrant beginnings and is now used so often that the average speaker may not even know the translation etymology or literal meaning of what they’re saying when they utter this odd sounding German word. It’s interesting that the word is used so commonly now that there have been a few intervening generations since the wave of immigrants that brought ‘gesundheit’ to North America. It’s even more interesting to think that the origins of the use of ‘bless you’ to soothe someone who has sneezed are so dark. What will you say the next time someone sneezes?

Answer 3

I often heard it used in a joking way, such as when someone says a long or hard to pronounce word. It's meant to make mild fun of German language, with lots of difficult to pronounce or unusual sounds (for Americans), such as Umlaute, sch, tz, ck etc.

The joke is, if it's not obvious by now, that the word to which one would reply with Gesundheit! supposedly sounds like someone sneezed instead of saying an actual word.