Basically, a disc contains a series of “0” and “1” in form of pits and lands on the spiral of the data track.
When a disc is scratched, some pits and lands cannot be read by the laser. In other words, the drive is not able to understand if in the track there is a pit or a land. Consequently, it is not able to understand if it is reading a “0” or a “1”, and then it is not able to extract data from the disc.
Actually, [B]all[/B] discs contains errors on the data track, but most of times these errors are correctable (both by hardware and software mechanisms). When a disc is scratched, the amount of errors is higher, and if the scratch is located on a critical sector of the disc (i.e. in the sector used by hardware and software mechanisms to recover data), these recovery data cannot be retrieved, and consequently the disc data cannot be read at all.
I know that this is not exactly the most precise formal description of what happen on a disc, but basically this is what happens on a scratched media