All right, that's a trifle hyperbolic. A prequel that is not just a work set in the same world, earlier, but a book leading up to the events of the first work, and explaining how the gone-to-hell-in-a-handbasket situation that opened it came to be, will.
It has some of the same problems as reading a series out of order -- since Smith and Jones appeared in Book 2, and Blane doesn't, Blane must die in this one -- but the writer has the choice of either ending it all miserably, or patching together some implausible and off-stage happy-ending for the characters that he wants to end it well for. A lot of writers opt for the second and probable it ain't. (Aristotle's dictum that an impossible probability is preferable to a possible improbability applies here.)
Not that sequels don't have their own problems. Especially if you ended the story with grand, all-is-resolved ending. Not even if you tweaked it at the very end. Set up for sequels is carried out in the middle of a story. And boy can it be interesting to juggle "this story is resolved" against "this world has its problems (of this scale) resolved."
Scale is big problem. Particularly if you are dealing with epic scale. Once you've saved the world from the Dark Lord, any other story is apt to seem anticlimactic -- and if you keep on throwing epic level threats at the world, it starts to look like cardboard -- but if Jack and Jill saved the village from a troll with the help of their mentor John, it can be interesting to hear how John first learned how to deal with trolls, or how the troll's second cousin showed up afterward to try to claim its hoard.
Not that my muse has ever had the slightest interest in either prequels or sequels. But you can't turn off your writer's head even when reading something you don't write.