Because the brain is enclosed in a rigid box, any increase in volume compresses vessels and tissue, reducing perfusion and killing the tissue.
Brain edema is caused by increased vascular pressure or increased permeability. Hypertensive crisis, concussion (mechanical damage with capillary fluid leaking into the brain). Brain edema => compresses vessels (capillaries) => reduced flow => ischemia => arteriolar dilatation => increased capillary pressure => increased edema
reduced oxygen => increased capillary permeability and shuts off sodium/potassium pump => cellular swelling