Correct, oil like anything does break down over a given period of time. Introduce to that an extremely harsh environment involving high speed rotation, lots of metal on metal contact, and of course high and extremely variable temperature changes. Remember that in an engine the only thing protecting vital moving components is a very thin film of oil. As the oil molecules break down, the viscosity changes as well as the molecular structure changes with contaminants and other foreign objects (debris, fuel, etc). Not to mention just basic shelf life.
I know the Navy is very stringent on shelf life, when it expires test can be ran to extend the shelf life or remove the object, material from service.