Why is it bad if the cars wheel-spin at the start.

In short, if you are wheel spinning you are not moving forward and you will likely lose position to those around you.

Wheelspin = loss of tractionTraction is the adhesive friction between the tyres and the track that allows the car to accelerate as the power... There's more... = loss of sequence in gear selection = poor start = a loss of position or, worse, positions.