Hare Krsna,
The key takeaway message for me from the Lord’s reply to Devaki and Vasudeva is that Krsna is transcendental and eternal. His selection of a mother and father is not something that happens by material arrangement. His selection of parents from among His devotees takes place eternally. Similarly, since the Lord is transcendental, His parents should also be liberated souls, not ordinary human beings.
“When the Supreme Personality of Godhead appears, He accepts His eternal father and mother, and they accept Kṛṣṇa as their son. This pastime takes place eternally and is therefore called nitya-līlā.” (SB 10.3.32 Purport)
In fact, it is not so easy to understand Krsna’s transcendental appearance and disappearance. This also includes the process of the selection of His parents. This is why Krsna says in BG 4.9 that “One who knows the transcendental nature of My appearance and activities does not, upon leaving the body, take his birth again in this material world, but attains My eternal abode, O Arjuna.” (BG 4.9)
Krsna, although appearing like a human being, is not a common man. He, who conducts the creation, maintenance, and annihilation of the complete cosmic manifestation, cannot be a human being. Yet there are many foolish men who consider Kṛṣṇa to be merely a powerful man and nothing more.
“Fools deride Me when I descend in the human form. They do not know My transcendental nature as the Supreme Lord of all that be.” (BG 9.11)
Therefore, in His reply to His parents Devaki and Vasudeva, Krsna is explaining His divinity to them. First, He says that they did obtain Him as their child so easily. Only due to severe austerity and penances (mixed with intense devotion and bhakti) were they able to obtain Krsna as their child. No mean feat! Lest we get carried away by such austerities, Srila Prabhupada kindly advises us that undergoing austerity like that of Prsni and Sutapa is not recommended for this age. Sankirtana yajna is the only recommended austerity for this age.
“One cannot expect to undergo tapasya to get Kṛṣṇa as one’s child, yet simply by chanting the Hare Kṛṣṇa mahā-mantra (kīrtanād eva kṛṣṇasya), one can become so pure that one becomes free from all the contamination of this material world (mukta-saṅgaḥ) and goes back home, back to Godhead (paraṁ vrajet).” (SB 10.3.35 P)
Next Krsna is reminding His parents that He has been their child in previous lifetimes as well.
SB 10.3.41-43: Since I found no one else as highly elevated as you in simplicity and other qualities of good character, I appeared in this world as Pṛśnigarbha, or one who is celebrated as having taken birth from Pṛśni. In the next millennium, I again appeared from the two of you, who appeared as My mother, Aditi, and My father, Kaśyapa. I was known as Upendra, and because of being a dwarf, I was also known as Vāmana. O supremely chaste mother, I, the same personality, have now appeared of you both as your son for the third time. Take My words as the truth.
The Lord had shown them His Viṣṇu form first just to remind them of His previous births. Otherwise, if He appeared like an ordinary human child, they (and the rest of the world) would not believe that the Supreme Personality of Godhead, Viṣṇu, has indeed appeared.
What I understand from the whole conversation is that it is a mistake to think of the Supreme Lord as an ordinary human being even though he may look like one. Therefore, Krsna is explaining His divinity right at the beginning so that Mother Devaki and Vasudeva are reminded of His transcendental nature and appearance. In this way, He is also comforting them and removing their fear of Him being killed by Kamsa. How can the Supreme Personality of Godhead be killed by anyone? For that matter, how can one be fearful in the association of the Lord Who is feared by fer personified? Even though Krsna is not our child or parent, we too can remain fearless if we constantly associate with Him through the chanting of His Holy Name.
All glories to Srila Prabhupada!
Krsna Katha 