When someone's had a tragedy in their family.Most people have had them. Someone just happened to ask?

They probably weren't trying to be rude, just trying to show that they cared because they couldn't think of anything else to say. I find myself doing that sometimes. If someone's says they were terribly sick, I might say "oh, what was wrong?" Not thinking that it could be something very personal, but instead, trying to show an appropriate reponse to the situation.