The Great Pokemon War, or the Kanto War, is a supposed war that took place years prior to the events in Pokemon Red and Blue. The reasons as to why the war was started are unknown. What is known, however, is that Lt. Surge, the Gym Leader of Vermilion City, was most likely a soldier in this war. When you first encounter Surge in Vermilion City, he rambles on about how an Electric Pokemon saved his butt during the war, but he never goes into any detail as to what the war was. He is also depicted as being a very stern individual, almost as if he was a sergeant sometime in his life.
This theory also explains why Red's father is never mentioned throughout the game, and why Blue's supposedly an orphan. There were so many casualties that were caused by this war, that it ultimately caused an age gap between generations.