Partially due to the pug being brachycephalic (the flat face/ short nose). It definitely causes breathing difficulty. Pugs are also more prone to heat stroke if left outside in the heat for too long due to the fact they cannot pant as well as other dogs to cool themselves down. Pugs are also prone to eye problems, allergies, hypothyroidism, gain weight easily and should have their diet monitored closely, and collapsing trachea. Each pure breed comes with it's own list of problems so do not be discouraged. Pugs are also known for being very smart and I know many that are wonderful pets.
Because whacked-out humans have used artificial selection to create near monsters for show in dog competitions. They do this by intentionally breeding certain characteristics over generations - basically manipulating their genes so radically that the animal can barely function. The people that do this - expert dog breeders - claim they are dog lovers.