Khuutra said:
My assumption was that Ares clouded his vision. That's why he didn't actually see his family - just shadows. But it is acknowledged that Ares has something to do with it, he even admitted as much in the final battle of the original game. |
Something along these lines. From what I understand, while Kratos worked for Ares he became so filled with rage/anger that it was just uncontrollable. Which is the main reason for his hate towards Ares, the deception. Ares sent him to destroy that village knowing that Kratos would murder his family in the process.