Outer space seems vast and empty, but the space directly above Earth is quite crowded with satellites and ... space junk!
Between the launch of Sputnik on 4 October 1957 and 1 January 2008, approximately 4600 launches have placed some 6000 satellites into orbit; about 400 are now travelling beyond Earth on interplanetary trajectories, but of the remaining 5600 only about 800 satellites are operational - roughly 45 percent of these are both in LEO and GEO. Space debris comprise the ever-increasing amount of inactive space hardware in orbit around the Earth as well as fragments of spacecraft that have broken up, exploded or otherwise become abandoned. About 50 percent of all trackable objects are due to in-orbit explosion events (about 200) or collision events (less than 10).
Officials from the space shuttle program have said the shuttle regularly takes hits from space debris, and over 80 windows had to be replaced over the years. The ISS occasionally has to take evasive maneuvers to avoid collisions with space junk. And of course, this debris is not just sitting stationary: in orbit, relative velocities can be quite large, ranging in the tens of thousands of kilometers per hour.
If you look at those objects in the pic, they'd have to be thousands of times larger than ANYTHING ever launched into space.
In reality if you shrank each dot down to actual size, you wouldn't see anything there at all.
The total area of the LowEarthOrbit 'sphere' encompasses many hundreds of millions of cubic miles and there is MUCH more room there than the photo would lead you to believe.....
Shooting down a satellite breaks it into smaller debris, which are harder to track. This is the reason everyone was against the Chinese missile launch. (And of course the fact that it gives them practice shooting down satellites)
The spy satellite shot down by the US government was in a much lower orbit, so the debris field fell to Earth instead of becoming a problem.