1. It's the character's background from the perspective of the character.
2. Rewriting the events around that is the GM's prerogative.
3. GM's should be trying to make the game fun.
To sum up - the GM should mess with the background all he wants, PROVIDED that it's not in such a way as to lessen the enjoyment of the player.
In the 'parents killed by orcs' example - it's no good just lumping it out as "haha, we killed your parents! And we're not orcs!". You could potentially have an entire plotline which culminates in the PC discovering some ulterior motive to the murder of his parents, which may or may not involve orcs.
Personally I think it would be awesome if a DM took my backstory and twisted it into something new. Especially if it leads to some good roleplaying moments - the 'parents killed by orcs' character gradually and grudgingly has to accept that there are things worse than orcs, or worse still has to team up with some orcs to track down the real killers.
It's the stuff good fiction is made of.