The link provided by @Tej in his excellent answer enabled me to begin to read the full text of that awful "night time massacre" in its English translation.
The following exchange between Kripa and his nephew Ashwatthama is very noteworthy in that Kripacharya clearly warns the son of Drona that he is going to commit a very sinful act:
[Kripa said:] "In this world, the slaughter of sleeping persons is not applauded, agreeably to the dictates of religion. The same is the case with persons that have laid down their arms and come down from cars and steeds. They also are unslayable who say ‘We are thine!' and they that surrender themselves, and they whose locks are dishevelled, and they whose animals have been killed under them or whose cars have been broken.
All the Pancalas will sleep tonight, O lord, divesting themselves of armour. Trustfully sunk in sleep, they will be like dead men. That crooked-minded man who would wage hostility with them then, it is evident, would sink in deep and limitless hell without a raft [to] save himself. In this world [O Ashwatthama] thou art celebrated as the foremost of all persons conversant with weapons.
Thou hast not as yet committed even a minute trespass. When the sun rises next morning and light shall discover all things, thyself, like a second sun in effulgence wilt conquer the foe in battle. This censurable deed, so impossible in one like thee, will look like a red spot on a white sheet. Even this is my opinion."
And this is Ashwatthama's reply:
Ashvatthama said, "Without doubt, it is even so, O maternal uncle, as thou sayest. The Pandavas, however, have before this broken the bridge of righteousness into a hundred fragments. In the very sight of all the kings, before thy eyes also, my sire, after he had laid down his weapons, was slain by Dhrishtadyumna. Karna also, that foremost of car-warriors, after the wheel of his car had sunk and he had been plunged into great distress, was slain by the wielder of gandiva.
Similarly, Shantanu's son Bhishma, after he had laid aside his weapons and become disarmed, was slain by Arjuna with Shikhandi placed in his van. So also, the mighty bowman Bhurishrava, while observant of the praya vow on the field of battle, was slain by Yuyudhana in total disregard of the cries of all the kings! Duryodhana too, having encountered Bhima in battle with the mace, hath been slain unrighteously by the former in the very sight of all the lords of earth. The king was all alone in the midst of a large number of mighty car-warriors standing around him. Under such circumstances was that tiger among men slain by Bhimasena.
Those lamentations that I have heard, of the king lying prostrate on the earth with his thighs broken, from the messengers circulating the news, are cutting the very core of my heart. The unrighteous and sinful Pancalas, who have broken down the barrier of virtue, are even such. Why do you not censure them who have transgressed all considerations? Having slain the Pancalas, those slayers of my sire, in the night when they are buried in sleep, I care not if I am born a worm or a winged insect in my next life [...]
When my sire, having slain hundreds and thousands of warriors with keen shafts, had laid aside his weapons, he was then slain by Dhrishtadyumna. I shall slay that slayer today in a similar condition that is, when he will have laid aside his armour. The sinful son of the king of the Pancalas I shall today slay by a sinful act. It is my resolve to slay like an animal that sinful prince of the Pancalas in such a way that he may not attain to regions earned by persons slain with weapons! Put on your coats of mail without delay and take your bows and swords, and wait for me here, ye foremost of car-warrior and scorchers of foes."
Having said these words, Ashvatthama got upon his car and set out towards the direction of the enemy.
Source: http://www.sacred-texts.com/hin/m10/m10005.htm
While this passage does not explicitly state as a commentary that adharma following upon adharma made Ashwatthama a monster, the son of Drona says it himself to explain his prospectively dishonorable conduct -- in his perception Dharma was first abandoned by the other side:
The Pandavas, however, have before this broken the bridge of righteousness into a hundred fragments [...] The unrighteous and sinful Pancalas, who have broken down the barrier of virtue [...] have transgressed all considerations.
When the Pandava camp has thus resorted to Adharmic means to destroy so many great heroes who fought on the Kaurava side (the full list of which he states in his above reply to Kripa, including his father Drona himself) Ashwatthama is determined to resort to any unholy means to cause the destruction of such immoral persons, specifically because being killed other than in battle will deprive his enemies of the posthumous glory in the afterlife that is reserved for Kshatriyas killed in armed combat:
When my sire [...] had laid aside his weapons, he was then slain by Dhrishtadyumna. I shall slay that slayer today in a similar condition that is, when he will have laid aside his armour. The sinful son of the king of the Pancalas I shall today slay by a sinful act. It is my resolve to slay like an animal that sinful prince of the Pancalas in such a way that he may not attain to regions earned by persons slain with weapons!
That is a sufficient proof for me that grief and rage over his father's unethical killing and the long list of Adharmic acts of destruction perpetrated by the Pandava side on the Kaurava heroes caused Ashwatthama to knowingly forsake the path of Dharma to wreak vengeance on his father's killers, which he considers his primary duty. He is also willing to face any karmic consequence of such a terrible and immoral action:
Having slain the Pancalas, those slayers of my sire, in the night when they are buried in sleep, I care not if I am born a worm or a winged insect in my next life.
Ashwatthaman's descent into vengeful madness led him to slaughter the entire sleeping Pandava army including Draupadi's sons and brothers, and culminated in the unpardonable act of sending the Brahmastra (which unlike Arjuna, he was unable to retract, being a person of impure soul) into the womb of Arjuna's daughter-in-law Uttaraa, widow of Abhimanyu, leading to the stillbirth of Parikshit who was however resurrected by Lord Krishna before the Great God cursed Ashwatthama thusly for being a child-killer:
The holy one said, "The fall of this mighty weapon will not be fruitless. The foetus will die. But being dead, it will live again and have a long life! As regards thyself, all wise men know thee for a coward and a sinful wretch! Always engaged in sinful acts, thou art the slayer of children. For this reason, thou must have to bear the fruit of these thy sins.
For 3,000 years thou shalt wander over this earth, without a companion and without being able to talk with anyone. Alone and without anybody by thy side, thou shalt wander through diverse countries, O wretch, thou shalt have no place in the midst of men. The stench of pus and blood shall emanate from thee, and inaccessible forests and dreary moors shall be thy abode! Thou shalt wander over the Earth, O thou of sinful soul, with the weight of all diseases on thee.
The heroic Parikshit [...] shall rule the earth for sixty years. More than this, that boy shall become the mighty-armed king of the Kurus [...] before thy very eyes, O thou of wicked soul! Though burnt by the energy of thy weapon's fire, I shall revive him. O lowest of men, behold the energy of my austerities and my truth."
The resurrection of Parikshit by Lord Krishna is one of the most awesome incidents in the Mahabharata. The earlier answers by the kind members (that led me towards this understanding of Ashatthama's shocking moral decline) are most appreciated.
