species that are usually peaceful can and will become aggressive if they don't have enough room. i mean, if you had to live in a one-bedroom apartment with 17 family members you would start to get irritated, too!
and like Mgamer said, this aggression is stressful and can lead to death. fish can die from stress alone because it screws up their ability to balance water/salts in their body and their cells essentially drown (at least in FW fish).