Why does fixed space make it so that justifying is good and non fixed makes it bad?

Because if it's fixed, can, starting with the first character, go through the text adjusting the space between words and letters (carefully and subtly so that optically it doesn't look as if there has been adjustment unless you look very closely) and swapping out words/changing sentences/re-ordering until the text fits almost perfectly in the space.

(This is also why justification can't ever really _fully_ work on the web in a general sense, can only have an approximation and the question then becomes if it's worthwhile to have that or whether it's just more trouble than it's worth)

In fixed space, like newspapers, human editors would add or remove words in order to make the end result aesthetically pleasing. Non fixed space lacks this feedback loop, so you can end up with text that is both justified and awkward more often.

LaTeX doesn't do any of that and the end result is beautiful. It's even better than what human editors produce.