The flavor of a spice is derived in part from compounds (volatile oils) that oxidize or evaporate when exposed to air. Grinding it greatly increases its surface area and so increases the rates of oxidation and evaporation.
However,if the spice or herb is stored as a ground powder, these volatile oils will evaporate, and in little time only a pale, weak version of the original spice or herb is left.
Thus,flavor is maximized by storing a spice whole and grinding when needed. This way the oils will be activated and used when they are at their best.
The result is not only more, but also better taste.