Hank murdered Rose and all of Shady Sands because a big part of his Vault-Tec fantasy is total control over women and their reproduction and feelings. Rose was born as part of a breeding program specifically to make biddable, "childlike" stock for their superiors like Hank to breed and use and control. The recent "adolescent rebellion" storyline in S2 for the other Vault dwellers drives this home: all the non-"management" people here are supposed to be childlike eternally.
Rose, the child bride, the breeding stock, went through adolescence sooner than the others. She got curious about the world -- she met a woman she fell in love with and realized, as part of actually growing up finally, that she had a *self* and desires of her own and she wanted her children to get to be free, to not be pawns of their father and his cult-like corporation. She wanted to raise them in a place where they could be themselves, whoever that was, without all the years of stifling and control she went through. And so Hank went off on her, like an ex-husband murdering a woman's entire family because she's filed divorce papers.
And then he proceeded to try to break Lucy to the mold of what Rose "should" have been in what was a pretty clear case of emotional incest. Which creeped Norm out, who loves his sister deeply in a normal brotherly way, but because there was no outright "violence" or direct physical abuse (though I'd argue brainwashing Lucy to be breeding stock with a man chosen by her father absolutely counts as sexual abuse) he had no one to talk to and no way to articulate why everything felt so Wrong at home as he sat there watching his father force his sister to be the Perfect Wife.
I'm fascinated by how the emotional incest and grooming Lucy went through is largely ignored in fandom discussions I've seen. I think wrestling with the fallout of that is a major part of Lucy's story -- and Norm's too, honestly. I'm excited to see them find their way through that and back to each other as a family more on their own terms vs the way their father tried to warp their relationships with each other and themselves.
