Thanks to the wonders of material science we now have a decent grasp of why that seemingly small disparity in carbon content makes such a big difference: in steel, those carbon atoms nestle neatly between the iron atoms creating a strong, immoveable lattice. Too much carbon and the structure of the lattice is imperfect, so the metal can easily shatter (cast iron). Too little and the iron atoms can slide over each other without much resistance (wrought iron). Counterintuitively, you want your iron to be nearly pure, but not entirely pure.
