Does that mean that the piston rings & sleeve wear out due to high RPM which leads to low compression or may be damaging the sleeve or piston ?
Yes, once the engine overrevs it can be damaged in a number of areas and ways, including scoring of the piston/ring & sleeve. Once these are damaged, compression is lost and you could say the engine is burned out, burned up, blown, cooked, etc. [

] It's generally not worth replacing these parts due to their cost being a large fraction of that of a new engine, not to mention other possible damage (like bearings).