LWG has nailed it very well. Oil doesn't break down, but the important additives in it do. There are around 7 additives in most oils, all designed to make oil perform way beyond its basic abilities.
Viscosity Improvers are long-chain polymers added to the base oil product to keep the viscosity stable over a wide temperature range. Oils with large amounts of VI's are known as multi-grade oils.
Anti-wear additives are used to counter wear on engine components. These additives can range from zinc and phosphorous compounds that form chemical bonds on metal surfaces to reduce spalling, through to simple additives such as graphite and molybdenum compounds that increase lubricity.
Anti-corrosion compounds are designed to chemically react with corrosion-causing chemicals, created by the combustion process, to neutralise them.
Anti-foaming additives are added to oils to reduce the tendency for oils to foam, when being thrashed around inside high-speed rotating components.
Oil contains chemical dispersants that stabilize contaminants, and prevent them from agglomerating and separating from the oil to form dirt buildup.
Oil contains detergents that neutralise oxidation by-products, and which keep engine internals clean. Some detergents are in the oil naturally, and some are added.
Oil has Oxidation Inhibitors added to prevent oxidation, which produces acid, sludge, varnish, thickening and decomposition of the oil. Oxidation is caused by high temperatures, reactions with free oxygen and nitrous oxide, and chemical reactions caused by unstable metal ions. Oxidation destroys oils ability to lubricate properly.
Oil contains Friction Inhibitors that are in the form of straight-chain and fatty-acid molecules. These chemicals work to reduce friction between any two metal surfaces that are sliding or rotating against each other.
So, you can see that oil is a complex mix of many chemicals, which are broken down by heat, by corrosive by-products of combustion, by oxidation, by other unstable chemicals, and by reaction with unstable metal ions that are basically free-radicals looking for a chemical reaction to stabilise their structure. Once they react with chemical additives in the oil, new compounds are formed, which are usually undesirable to keep in the oil.
Thus, we have a need to change oil regularly to remove the contaminents, and replace the additive levels in the oil.
Filters remove the larger sized particles of contaminents, but only fresh oil removes all the nasty buildup of undesirable chemical compounds, that are created by heat and the combustion process.
Used oil can be re-refined into new oil, via treatment in a complex process that removes all the contaminents, and which adds new additives to bring the chemical structure up to the equivalent of new oil.
However, most re-refiners do not treat used oil adequately to ensure it meets the standards of new oil, due to the high cost - and as a result, re-refined oil is looked down upon, by most end-users, as a sub-standard product.
Nowadays, most used oil is refined into bunker oil for burning in ships engines, by merely cleaning the major contaminents from it.