For some reason when I saw the flashback in this episode it reminded me a lot of Gaara. Somehow I got the impression that the father knew Itachi was too strong and dangerous... and I thought maybe they attacked Itachi first and then Itachi killed all the rest of them just out of spite. As for why he would have spared Sasuke in that scenario I'm not sure.

I actually feel the idea someone said of Itachi wanting to die and creating Sasuke as his nemesis is the best explanation though. Thats how I have viewed Itachi from the begining and nothing I can think of really goes counter to that.