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The oil does not handle the heat very well. It does start a number of chemical reactions making the oil bad over time. Just heating the oil makes it form trans-fat bonds which are unhealthy, but it also makes sot and other compounds which may be poisonous and could cause things like cancer. It is still low amounts and probably harmless but still not the best thing you can use to cook. However oil will also react with oxygen and turn rancid. This is not actually a dangerous thing but does make your food taste bitter. Oil will become rancid whenever it have access to oxygen but the heat makes it go rancid much faster.
You can actually reuse cooking oil a few times, fast food restaurants do it. However there is a limit to how long you can use the oil for before it gets bad. So for home cooking it is usually best to just use the oil once and then dispose of it.
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