Why is electrical air insulation worse at high altitude?

At high altitude air is less dense. This means that any ionised air molecules (or charged pollution particles) in the air have less other air molecules (or pollution particles) to collide with as these ionised/charged particles accelerate towards the electrical conductors they are attracted to (with the opposite electric potential) . As they have a better chance at accelerating for longer without being slowed down by colliding with other air molecules/ pollution particles (as they would in more dense air) they are able to reach higher speeds on average and so can cause a Townsend avalanche more easily A Townsend avalanche is where a charged particles impact causes more charged particles to be created and these accelerate and impact with other particles creating more charged particles, a kind of chain reaction. Note: there is actually a knee point in this trend, where if the pressure is reduced too much there are not enough molecule's/particles close together so an avalanche breakdown of the air is less likely to occur. 

 This effect is related to Paschen's law