Why do we black out when we drink too much?

Black out. Alcohol can decrease the ability of the brain to remember especially short and long term memory. The more one drinks the more the impairment to memory builds up to the point where there is partial or complete memory loss for a period of time, called alcohol black out.
Nobody really knows. Alcohol, like other rapidly absorbed short-acting sedatives can cause "blackouts", memory lapses where the memory is not stored in the normal place. The memory may actually be found again when the individual is exposed to alcohol or a similar drug again - this is how "truth serum" works. Some people blackout very easily, others never do. It is poorly understood. If this is you, drink less/stop.