I asked an electrician about this once and they told me the arcing generates heat that travels up the conductor and into the wall, damaging the insulation and sheathing over time, and eventually exposing the bare, hot (as in warm) wire in the wall. This might introduce the wire to conditions where additional arcing (and additional heat) is likely -- for one thing you probably now have multiple bare wires in close proximity -- which is a common source of electrical fires.