When we look at islands across the planet (think the islands of the galápagos and hawaii) we see that there are a remarkable number of island endemic species, species that are found nowhere else. what is a possible explanation for this observation?

Island isolation promotes allopatric speciation. Species are separated by the physical barrier which is in the ocean and islands are being isolated by each other by bodies of water.
 There is no gene flow which occurs between the separated species. Living in the distinct island. The species get adopted by the island to the environment.
They then diverge as they separate species.