Why is an "incest baby" said to be messed up, in a medical sense?

Medically speaking..: I'm not sure if you mean psychologically or medically, as there are consequences in both areas. Medically, offspring of closely related parents are more likely to inherit the same recessive gene for a disease. As Long as a baby only gets 1 "bad" recessive gene, he or she is okay, but if the baby gets that same "bad" gene from both parents, then he or she is likely to develop the disease.