In his book and last DVD, Mysterio admits that his knees were destroyed because of his move set.
West Coast Pop: His finisher was originally the West Coast Pop. When executed properly, Mysterio slams his own knees into the mat.
Diving Senton: Mysterio cannot control how the opponent falls backwards, so he has to take the brunt of the landing in his heels. Every hard impact that the feet take, it impacts the knee joints too.
Diving Hurricanrana: After contact, Mysterio twists into a facedown position, landing on his knees and forearms.
Diving Splash / Frog Splash: The landing impacts the toes or knees. If the toes touch the ground too soon before the knees do, the move looks clumsy. So most mexican wrestlers will take the impact on their legs. (Their midsection hits the opponent, but knees hit the mat).
And remember, he also does many of these to the outside of the ring to. Landing on the concrete makes them worse.
Mysterio's knees have been weak since before he signed with the WWE. And he has a habit of working through injuries instead of resting them. This makes the injuries worse. And he has had dozens of surgeries to repair his knees.
His first knee injury happened in a tag team match against Shannon Moore. He chose to work through it, and the later storyline with A-Train was written to explain his absence (and put A-train over).