This concept was first pointed out to me some years ago by the brilliant Dean Wesley Smith when he was critiquing one of my stories. Basically, it's when an author introduces a story element or plot twist which would in reality so profoundly undermine the world in which it exists that the story no longer makes sense.
Dean was critiquing a story of mine where homelessness was in effect a transmissible disease. If a homeless person touched you, you swiftly became homeless, and then socially invisible, and then literally invisible. This was going in a setting of contemporary Portland. As Dean quite rightly pointed out, if such a thing were true, nobody who could possibly afford otherwise would go out in public without body guards and a security perimeter. The separation between the wealthy and the middle class and below would become an uncrossable gulf. Life would look nothing like it does in our current society if this were true.
More prominent examples of the balloon prick idea include the Star Trek transporter. With such a device and its attendant features such as the biofilter, you have fantastic healing powers and functional immortality. Topics which are barely addressed anywhere in the multiple series, and when they are, only as plot conveniences. Likewise, since they can do point-to-point transportation when needed, why bother to ever have a transporter room? These issues are simply never explored. There's sufficient story action and plot sleight of hand that most viewers never notice.
For another example, see Naomi Novik's Temeraire series. Within the narrative, it is observed that the Romans had dragons. Presumably so did other ancient cultures of the world. That's a balloon prick idea. Aerial reconnaissance capability means that over-the-horizon deep water navigation is reasonable from the very beginning of long range seafaring, which profoundly changes the dynamic of ancient maritime cultures such as the Minoans, the Romans and the Phoenicians. The likelihood that the trade and colonization patterns of those cultures would have led to a close equivalent of Napoleonic Europe is deeply improbable. The Temeraire novels make sense only if you parse them as being about people who have acquired dragons in the very recent past, and not yet undergone the cultural changes that free flight and aerial combat impose. Which is, in effect, what's actually going on in the books of that series. The central story question is "How would dragons have affected Napoleonic Europe and rival world powers?", not "How would dragons have affected the development of human civilization?"
Mind you, I am a huge fan of both Star Trek and Temeraire. In both cases, the balloon prick idea in play doesn't interfere with the success of the narrative because of other strengths. But for this reader and viewer, in both cases, the balloon prick idea interferes with my suspension of disbelief and requires me to work harder to buy the story.
Take this concept of the balloon prick idea for what it's worth, but do take it into account when building your worlds and writing your stories.