My theory on why he killed his clan is that of simple greed. Due to his possession of an advanced sharingan and an immense amount of power for someone his age, I think he wanted his abilities to be unique. So to prevent more sharingan users like himself he wiped out all those with the ability to grow into someone like himself. He left Sasgay alive to give himself something to keep himself growing more powerful. This is also why he wants Sasgay to become an avenger who's after his life. He knows that he will do whatever it takes to gain enough power to kill his big brother, thus making him a dangerous opponent in the future and a reason for Itachi to keep striving for power.

Of course it could be that I'm just insane.