If a species produces an excessive number of males, then it becomes advantageous to produce more females to mate with them, so evolution is always nudging them back to a 50:50 ratio:

https://www.blackwellpublishing.com/ridley/tutorials/Adaptat...

So I guess the idea behind genetic engineering is to destabilize the ratio and wipe out the species faster than natural evolution can respond.

I would suggest reading "The Selfish Gene", which covers a lot of topics like this.

It would remove those less fit. I think the point of the effect only being at second generation is that it makes the lack of fitness signal weaker in these males than ordinarily sterilised males. Added to that they keep releasing the modified mosquitoes so they are more numerous (in effect more fit since they have a massive breeding advantage from the humans breeding them).