Here is a good, basic description: http://gizmodo.com/5681005/giz-explains-why-batteries-die
Basically, batteries are chemical reactions. Even though the reaction can be run in reverse (to recharge), no reaction is 100% efficient. Charging and discharging corrodes the anode/cathode and alters the structure. This makes them less capable of accepting ions. The electrolytes oxidize and decompose as well.