Okay, the answer is simple guys, just because he's a worm doesn't mean he can't get his freak on, in more ways than one.
Here's a example of how it may have went down:
He may have been drunk and was probably aroused by Oola's dancing.
Jabba: "Oooooh your so fine, I must have you with my wine."
Then he began pulling her close to him. She of course refused and tryed to stopped this, playing a tug of war with Jabba.
Oola: "NO YOU SICKO!" NO! NO! NO! NO!"
Jabba: "YES! YES! YES! YEEEEEESSSSSS!"
Oola: "I TOLD YOU BEFORE YOU FAT SLUG, NO WAY! GO GET HOSED DOWN!"
Jabba: "YOU WORM HEAD, YOU'VE DEFIED ME FOR THE LAST TIME! YOU ARE NOW BANTHA FODDER!"
Oola: "OH ****!...
AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA - (MUST OF BEEN A HELLVU DROP, HUH?) -AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAHHHH!"
Jabba: "MUHAHAHA! GET HER RANCOR! MUHAHAHAHAHAHAHA!"
RANCOR: RRRRRRRRRWRWRRRWWRWRRRRRRRRRRR! [translate] "Kiss my chapped ass Jabba, you haven't bathed me in three weeks! I mean really, I smell you fat slug! And another thing....Oooo! What's this?"
Rancor picks up Oola, Oola screams bloody murder. Rancor freaks out and doesn't know what to do,
so he eats her to shut her up.
Jabba: "MUHAHAHAHA! That'll learn ya!"
So anyway, that's how I see it. That was probably the real reason he killed her, because he got tired of her refusal.