Can someone explain why Lefty was whacked?

Lefty was whacked, most likely along with everyone else in Sonny Black's group, because they invited a rat and therefore were a threat to the crime family as a whole. Lefty, in particular, brought Donnie to the family, so his fate was probably worse than simply getting killed.

However, it's understood that the movie isn't an entirely accurate depiction.

The person above explains it well but I wanted to add that the FBI arrested Lefty on his way to being whacked.

In reality the nature of the execution, the cutting off of hands, was the telling factor. Lefty was actually arrested on his way to being whacked but refused to strike a deal. He even tried to arrange his own bail and face his fate rather than become a rat. The bosses were so impressed by his loyalty they gave him a pass.

Despite being Lefty's 'protegé' it was Sonny Black who Donnie developed the close friendship with. Similarly it was Sonny who placed all his jewelry in an envelope prior to being whacked and, according to Joe Pistone, Sonny's girlfriend contacted him and claimed it was Sonny who said that if it was anyone who took him down he was glad it was Donnie.

All that being said Sonny (and probably Lefty had he not received a pass) was shot and had his hands cut off. Shaking hands was a formal way of introducing a wise guy to a crew, so removing Sonny's hands was symbolic of allowing a rat in.

I've had a lot of sobering thoughts in my time Del Boy, it's them that started me drinking!

You might just be the only one. Lefty bought it because he brought an FBI agent into the mob. That's also why Sonny got whacked and his hands cut off.

Lefty would be the 1st one I'd whack, if I was in the Commission. He vouched for Donnie many times, and that means you put your life on the line for the guy. If Donnie craps out, so does the guy that vouched for him.