Things die out or go to a lesser form (inter-breeding, etc)....not a higher form. They become defective when the genetics are altered. How could anything evolve in sequence if it couldn't adapt to genetic changes...much less climate and environmental circumstances? I'm not talking about yester-year "theory"... but present-day observations.
Contrary to what you've been told, not all changes to genes make them defective, most mutations are point mutations which very seldom are anything but neutral. The same thing applies to gene duplication. Inter-breeding occurs only in small exclusive populations, and 'defective' genes are the result of a slightly different mechanism. Look up 'Founder Effect'.
Mutations occur most frequently as neutral to the environment. The next most frequent are those that are deleterious to the organism given the environment, or deleterious given any environment. There is a smaller portion that is beneficial given the environment. If you consider that there are, as a rough estimate, 6 or 7 (measured) mutations per person, there will be approx >=36 x 109 mutations in the human population (not necessarily all different mutations). Even assuming a very small percentage of beneficial mutations, its easy to see that many people will have mutations of varying degree that are not neutral or deleterious.
If you want more information, I can go into much more detail.
If you are not referring to mutations but to the 2LoT, living organisms utilize external energy and excrete 'entropy'.
There really is no such thing as a "lesser form" or a "higher form" when it comes to species. That's just a man-made value judgment.