  One of the main challenges facing standard hierarchical structure formation
models is that the predicted abundance of galactic subhalos with circular
velocities of 10-30 km/s is an order of magnitude higher than the number of
satellites actually observed within the Local Group. Using a simple model for
the formation and evolution of dark halos, based on the extended
Press-Schechter formalism and tested against N-body results, we show that the
theoretical predictions can be reconciled with observations if gas accretion in
low-mass halos is suppressed after the epoch of reionization. In this picture,
the observed dwarf satellites correspond to the small fraction of halos that
accreted substantial amounts of gas before reionization. The photoionization
mechanism naturally explains why the discrepancy between predicted halos and
observed satellites sets in at about 30 km/s, and for reasonable choices of the
reionization redshift (z_re = 5-12) the model can reproduce both the amplitude
and shape of the observed velocity function of galactic satellites. If this
explanation is correct, then typical bright galaxy halos contain many low-mass
dark matter subhalos. These might be detectable through their gravitational
lensing effects, through their influence on stellar disks, or as dwarf
satellites with very high mass-to-light ratios. This model also predicts a
diffuse stellar component produced by large numbers of tidally disrupted
dwarfs, perhaps sufficient to account for most of the Milky Way's stellar halo.
