Question: Why did Matsumoto have O-ren's parents killed?
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Answer: The film does not explain, but O-ren's parents must have been involved in some sort of shady business dealings to have incurred the wrath of Matsumoto. When he is killed, O-ren's father is wearing the uniform of a United States Army Sergeant Major (pay grade E-9), which is the top rank of an enlisted man. He must have been working with Matsumoto in some sort of illegal smuggling ring that involved international connections through the U.S. Army that went bad, or maybe O-ren's father wanted more money and he was in the way, etc.
Scott215