The sickness comes from all the nano tech in the air.
Part the First, Nell sees something peculiar; Harv explains all:
"See, there's mites around, all the time...They're in the air, in food
and water, everywhere. And there's rules that these mites are
supposed to follow, and those rules are called protocols. And
there's a protocol from way back that says they're supposed to be
good for your lungs. They're supposed to break down into safe pieces
if you breathe one inside of you." Harv paused at this point,
theatrically, to summon forth one more ebon loogie, which Nell
guessed must be swimming with safe mite bits. "But there are people
who break those rules sometimes. Who don't follow the protocols.
And I guess if there's too many mites in the air all breaking down
inside your lungs, millions– well maybe those safe pieces aren't so
safe if there's millions."
As for why he wasn't cured, there's no specific cite but from the overall tone of the book Harv probably could have been cured if he was wealthy, powerful, connected, or "valuable". Since he's just a common street kid - tough luck.