Toenails provide protection to our toes for if we bump our toetips or drop something on our toe. In protecting us, these poor nails sometimes undergo enough damage that they can look bruised and/or loose, they can also get blistered underneath. Depending upon the level of involvement of the nail, your podiatrist may recommend removing the toenail. The damage that has been done is what will determine if the nail will grow back and how it will grow back. The reason for removing the nail isn't because we like to take toenails off, but because a toenail with extensive damage or fluid (blood or blister) underneath it can harbor infection.
Also, some times the bone underneath may be fractured and if the skin is broken under the nail (and we don't know about it soon enough) this can lead to infection in the bone which can lead to a need for long-term antibiotics or in some sad circumstances an amputation of the toe or part of the toe.