Satellites and debris orbit around the Earth at a rate of 7 km/second (28,500 km/hour). At these speeds a single collision has potentially disastrous effects.
A single satellite or debris collision can convert 1 derelict or failed satellite into 1000+ fragments of debris, each of which in turn present a major risk for other spacecrafts in orbit.
A reconstruction of the collision of the Iridium33 and Kosmos2251 communications satellites can be viewed.
As represented below, the cost or impact of a single collision increases over time to dramatic proportions as the resulting orbital debris spread exponentially over a large number of orbital planes at various altitudes over time.