Why are there fish species that live in darkness but still develop eyes that then degenerate, are functionless, sealed over, or so small they are almost gone completely?

The blind cave fish is one of many species of fish we know of that live in the darkness. Often these fish lose their pigments, change jaw formation, and develop odd sleep patterns. The blind cavefish and the surface dwelling Mexican tetra though look different can interbreed, and their offspring become hybrids that can also interbreed back with the parent populations. The two populations are genetically very similar but cave fish have low genetic diversity from the constricted food. The intermixing of the cave and surface forms combine different traits of blind/albino/altered sleep cycles and vision/color/daylight, which causes the hybrids to have a wide range of color, eye size, visual capabilities, etc…

The blind cave fish as adults lack functional eyes but they still have small eyes that actually formed as embryos and continued to form the lens and retina. The blind cavefish actually experiences the high cost of the growth but never gets to benefit from the sight! Eventually the cells self destruct, or undergo “apoptosis” and the partially formed eye degenerates and sinks into the eye orbit.  This lack of eye growth then causes the cavefish eye to get “swamped” by a flap of skin.

So the blind cave fish form eyes but destroys them right after and their same-species neighbors have fully functional eyes. What is causing the blind cave fish to degenerate their eyes? And why?

Though there is disagreement on the strongest selection for degeneration, I believe the strongest idea is that gene ACTIVATION and not gene LOSS OF FUNCTION is what controls the degeneration of their eye. We have shown that the cavefish have the ability to actually form an eye if the lens from a surface form is transplanted in. This is because the lens controls the signaling outside the eye itself...so give the blind cave fish their sunny neighbor's lenses right from their eyeballs and the blind fish reform their own eyes.

Darkness also can create a neutral selection for allowing mutations to build in the genes for the eye, and conserving energy by omitting the eye in the dark might have assisted in the drastic change.

But there is another force for change called Pleiotropy…and this is what most likely drove the eye loss in the cavefish. This is the idea that 1 gene can do multiple things, some things more helpful than others. The gene may have helped the fish adapt in some way but it also caused them to stop the formation of their eye. This is why they continue to develop it but stop mid way, they havent lost the instructions for the eye but instead developed a new gene that disrupted those instructions. 

http://www.sciencedaily.com/releases/2012/01/120122201209.htm