I think Carmine got killed because basically since the banana's war the bonnano's had been splintered, so they oked the hit on carmine to consolidate that family and probably because rusty was willing to cut the other families in on a bigger piece of the bonnano drug trade than carmine would have been.

Carmine wanted to keep whatever the bonnano's had going to himself, rusty sold some of it off for commission approval to be boss. He likely had massino make a deal with zips and carmine ends up on the floor of the restuarant patio. I don't know, just a theory that would seem consistant with operations in that world