Bad news stops reaching the president
A president needs people around him who will tell him when he is wrong. Military leaders need to be able to say a strategy is failing. Economists need to be able to say a policy isn't producing the expected results. Intelligence officials need to be able to deliver information he doesn't want to hear. Lawyers need to be able to say an action is illegal.
A narcissistic president has a difficult relationship with this kind of information. If criticism threatens his self-image as uniquely competent, criticism becomes an attack rather than useful data — and the people around him learn this quickly. They discover that an uncomfortable truth can be dangerous to a career, while telling him what he wants to hear is rewarded.
Eventually the president receives a filtered version of reality. That is extraordinarily dangerous when the person at the top controls the most powerful government in the world.