We report on hydrodynamical simulations (in a framework assuming the presence of CDM and a cosmological constant) in which the inhomogeneous interstellar medium is resolved. Strong outflows from supernovae remove low-angular-momentum gas, which inhibits the formation of bulges and decreases the dark-matter density to less than half of what it would otherwise be within the central kiloparsec. The analogues of dwarf galaxies-bulgeless and with shallow central dark-matter profiles-arise naturally in these simulations. We outline why galactic outflows preferentially remove low angular momentum material, and show that this is a natural result when structure forms in a cold dark matter cosmology. The driving factors are the fact that the mean angular momentum of accreted material increases with time, the existence of an extended reservoir of low angular momentum gas which is not within star forming regions and hence not subjected to being directly blown out and the tendency for outflows to follow the path of least resistance which is perpendicular to the disk.