The O2 sensor measures the amount of CO2 - obviously a byproduct from the magic happening in the engine. The O2 sensors are used to determine in real time your air to fuel ratio or A/F. Your A/F has a peak spot for performance, gas mileage, and emmissions. Granted when your stomping on the gas and hitting the track the feedback from the O2's mean fuck-all because it is running openloop. When your cruising down the highway or in town is when the system runs closed loop.
Closed loop means your computer is taking the air intake, ambient temprature, ambient pressure, and the O2 sensor readings to ascertain how much air and how much fuel to put into the motor at its current workload to keep bad gasses (like NOx for example) out of the atmosphere. It also helps with gas mileage, adds to the longevity to the motor because your not going to be running it too rich or worse lean.
Openloop is a set of predetermined fuel maps that are basically only used when your having fun in the car (i.e. flooring it or 100% throttle whichever term you want to use I care not). Putting the cutouts before the cats (o2 sensors) means your now robbing the information the cats receive from the exhaust, which means the computer isn't receiving the right signal, which also means its calculations for the A/F are now fucked.
Hence post-cat. I want to avoid the mixed signals that would be experienced with the whole pre-cat ordeal.