It’s war time. You have a capital city, and in that city is a massive amount of infrastructure. Factories alone, in war time many have been converted to manufacture supplies and weapons for the military.
The ones that are still making consumer goods are driving the economy.
If your enemy occupies that city, all of those factories are now at best shut down, or at worst work for the enemy. Highways and roads are blockaded, none of the economic powerhouse of the capital gets to support the rest of the nation anymore. That alone is a massive blow to the nation.
Capital cities also tend to be very well connected. They will have air strips, roads, highways, trains, etc. that are all unable to be used anymore, and may become useful for the enemy.
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