Critical Speed is the RPM at which the driveshaft is computer projected to bend or whip. Exceeding Critical Speed can produce vibrations that can result in driveshaft failure.

The vibrations can also cause damage to the differential gears and bearings. The transmission extension housing, along with the torque converter and planetary gears can also be destroyed.

When you take a small piece of steel and bend it repeatedly, the stress will eventually break the steel. The same effect occurs on your complete driveline when no attention is paid to Critical Speed.