I happen to be doing my Master's thesis on this forgotten war of 1915. Lots of bad stuff on both sides--but the 'bandits' were were aided by the Mexican government and their avowed aim was to take back the entire Southwest for Mexico. One of the planks of their 'platform' was to kill all gringos over 16--after obtaining all their money in the form of 'loans.'
Another plank was to get the blacks and Indians on their side by promising them all the Mid-West for a new country of their own.
I know it sounds crazy but there it is.
By the way, the old man's story has a few holes in it. He 'witnessed' the execution as the Rangers rode by and the Mexicans toppled off their horses--but he 'found' the bodies two days later? Something sounds strange about that.
Doesn't sound crazy to me. Quite the opposite.
They're a little outside your time period, but has your research delved into the activities of the Loyalty Rangers created by the Hobby Loyalty Act? (35th Legislature: 1917)
Some still confuse the Loyalty Rangers with the Texas Rangers.
It doesn't sound crazy at all --- especially because that still seems to be the plan.