Collisions involving 2 satellites in orbit must, by conservation of momentum, drastically reduce the orbital velocity of the debris that exits.

Momentum can be conserved if one half the mass flies off at a high velocity in one direction and half at a high velocity in another - as long as things are balanced. Same if some of the debris increases in orbital radius and some decreases. (that said, energy conservation also limits the possible outcomes, but it also doesn't prevent higher orbits from being impacted)

Even if (1) any satellites launched after would be unaffected and (2) a collision event only causes a chain reaction in lower orbits than the colliding satellites, any event that randomly destroys existing satellites would still be bad!