From first-principles calculations, we unravel surprisingly strong interactions between arsenic ions in iron pnictides, the strength of which is controlled by the Fe-spin state. Reducing the Fe-magnetic moment weakens the Fe-As bonding, and in turn, increases As-As interactions, causing giant reduction in the c axis. For the CaFe2As2 system, this reduction is as large as 1.4 Å . Since the large c reduction has been recently observed only under high pressure, our results suggest that the iron magnetic moment should be present in Fe-pnictides at all times at ambient pressure. Finally, the conventional electron-phonon coupling in the collapsed phase of CaFe2As2 gives a maximum Tc of 0.6 K and cannot explain the ~12 K superconductivity observed in some experiments. Implications of these findings on the mechanism of superconductivity in iron pnictides are discussed.