Why should you avoid asking what does this company do?

I am assuming that you are talking about a situation where a person is being interviewed at the company for a job. If I were interviewing a person who asked me that, I would immediately disqualify the person. The question is the same as saying: "I just want to make people think that I'm interested in getting a job. Since I don't have a clue what you do here, I also have no idea if I have any interest at all in working here, and I don't know or care if I have the skills or qualifications to do the job. Furthermore, I have just wasted your time and I couldn't care less." If you go for an interview, you MUST have adequate knowledge of the company, the position, requirements for the job, and skills you have that would make you an attractive candidate.