[DCWildcat]

And the non-oversimplified version: When it gets to late position and everyone has folded so far, hands are less likely to be multiway. That's common sense. Thus, hands that derive their value from their good implied odds--low suited connectors like 65s, crappy suited aces perhaps, etc.--won't get the implied odds they need to be profitable. Thus, limping with them is bad.

On the other hand, with less players, others hands gain value. Hands like A9o, KTo, etc., suddenly become +EV raising propositions. However, unlike the highest of those hands (AK, etc.), these hands tend to lose value with additional players. With the premium high card hands, the money that additional players put into the pot generally outweighs the fact that your winning chances drop a little. Weak high card hands tend to lose more from the extra players than they gain by the extra money in the pot.
So you should raise to limit the players.

There are other reasons--buying the button from MP2 or CO, gaining the initiative, etc.--but those aren't as important as what I outlined above. Remember that it's usually still ok to limp from early or early middle position, because the conditions I wrote about above don't apply.