Dogs are companion animals; they crave interaction with their owners.
Chaining a dog in the yard for long periods of time isolates him from his family. An isolated dog is frustrated, and a frustrated dog causes problems. The more hyper and aggressive this frustrated dog becomes, the less time the family wants to spend with him.
In addition to the psychological damage caused by continuous tethering, dogs forced to live on a chain make easy targets for other animals, humans, and biting insects. And they can easily fall prey to thieves looking for animals to sell to research institutions or to be used as training fodder for organized animal fights.
Another danger is that a dog's tether can become entangled with other objects, which can choke or strangle the dog to death.