I'd sugges that the main reason is that, in many incidents, competitors are satisfied that the incident made no significant difference to their results and rationally decide not to spend  time and effort in the protest process.

I tend to agree with John regarding sailors not protesting every incidence on water.
Further, I am of the opinion that Judges walking in the park, in a pair though, is definitely a constructive activity. It gives an informal environment to the sailors to approach and interact with the judges. The sailors do have many questions but are not sure when and where to interact with the judges. This walk in the park will encourage sailors interaction with judges and have a positive effect on the competitor's confidence on the system. 

When asked how many players are on the pitch in soccer, many would answer 22, but in reality it's 23 because the referee is part of the active game. In sailing, the Referee Committee CdP isn't part of the active game but is there waiting for someone to activate them. One of the biggest problems I observe, both as a racer and especially as CdR member is that these individuals speak a strange language full of exceptions. Instead of simplifying the game, they complicate it, and the protester and the protested party, in addition to being subjected to a wait and interrogation, very often emerge with confused ideas and penalties they don't understand. Ending up in front of the Referee Committee sometimes means having a terrible afternoon or staying up late. So why not resolve the situation like good friends over a cheerful beer? After all, sailing is a sport that should be fun. In my experience, I've never witnessed a protest discussion where the participants were having fun. So why go and poison a beautiful day?

An IJ that did a lot of teaching, in one of the seminars I attended, said to the room: ,There are two sets of rules at play on any race course: the Racing Rules of Sailing; and, the Jungle Rules.  The difference between them is what results from an interaction.
The easiest example I can think of is a starting line in a large fleet.  If you watch, rule 11 is broken so many times, yet seldom is a flag seen.  Why?  Because it's just the way it is.  Likewise for tight mark rounding.
When it does matter to the boats involved, you definitely will see a protest result.

Because it’s self-policing, there are many reason that competitors don’t feel compelled to protest, but for me and most everyone I know the overwhelming reason is to avoid the colossal waste of time that is the protest filing process and hearing. 
And there’s the fact that, no matter how right the protestor may be, once in ‘the room’, one’s chances are 50/50 of favorable outcome. 
As far as judges walking the docks, presumably to encourage lodging protests, that would greatly detract from the reasons my friends and I race together. 

Alessandro made a very good prespective of sailor's view these days. The problem is that something was forgotten on the way: The rules are there to protect everyone and to ensure that everyone is playing the same game, making it fair.
There is no problem if a competitor breaks a rule. Everybody does it. There is a problem if a competitor breaks a rule on purpose and/or he or she doesn't get a penalty for the breach.
Robert, thank you very much for opening this discussion, the matter concerns me a lot as well. Even thought, I think the main problem isn't having many infringements and few hearings, rather, having many infringements and such few penalties taken or given. 
Many years ago, my first sailing coach was preparing me for my first Regatta, and the first rule he taught was that I could and should penalise myself for a breach. It was an honor issue. Now, we see coaches teaching theirs kids ways of brealing the rules without getting caught.

Like many of you here I wager, I end up playing all 3 roles of racer, judge, and race organizer (in my case, for frostbiting and ILCA events). With short-course, close-quarters racing, we have lots incidents on the water but almost no protests. It's not because of procedural hurdles, since we've simplified those in our race documents. And because we run open hearings, the sailors tend to find them quite interesting. Still, we might get one protest in 5 months.

A few years ago, there was a distinct stigma in the air about protesting another sailor. As chief-cat-herder, I've worked to remove that through tone and repetition, normalizing protests as simply an appropriate part of our sport. I also run ~monthly hour-long rules sessions over Zoom to educate the fleet. When a protest actually happens, I go out of my way to calm the situation and bring it back to a friendly place. Still, very few protests. The sailors might holler at each other on the water, demanding a penalty be taken (which then usually is), but they all want to leave that behind at the bar after racing and I think that is fine. Fun and camaraderie first. Our series is taken seriously, but it isn't a qualifier to Worlds. I'll note that at the start of every year I need to remind the top of the fleet to not get cranky with the novice sailors who will make mistakes — being yelled at by a more proficient sailor is a fast way to get someone to never come back.

We also have some days, (yesterday in fact!), where we have to give a gentle lecture to the sailors before we announce the results of the day. No surprise to you all, it's usually about foolish port approaches at the top mark or bumper cars with no penalties taken on the starting line...

When a protest happens, it is usually due to sailor finally getting fed up with a repeat offender and wanting to make a point, but 99% of the time, we nip that in the bud by pulling a sailor aside for a quiet word. If someone really can't change their behavior, they are disinvited to race with us, but that only happens like once every 6 years. 

Lastly, like in all human endeavors, groups will respond to how the leaders model behavior.

We want sailing to be fun and we want it to be fair, because when it's not perceived as fair, it's not fun. The fleet will die. Protests are part of the toolbox, but as long as we are creating a respect for the rules, I'm not as worried about the number of protests filed.

The notion of walking the docks is a good one when the docks are the same.  In SF Bay, boats come from all over the Bay.  There may be only 3-5 boats from each of 10 different YCs or marinas for a particular event.

Even with all the boats in one place, this would quickly become a form of arbitration.  The competitors would explain the situation and the judge would offer an opinion or explanation.  Whether this is an improvement or not would have to be seen.

I think the point of this was in the morning before racing to get to know the sailors so they are comfortable with the judge(s) at the event. I find that when people know and trust the jury, they are more comfortable coming to the room as the "roll the dice" nature of the 50/50 commenters is reduced in their minds. 

From a game theoretic point of view, this is not strange at all. We have ended up in an equilibrium where all the sailors use a trigger strategy. This means that they don't protest unless the infringer has protested them earlier. This is, if all the other sailors also use this strategy, individually rational for every sailor. There doesn't need to be any explicit agreement on this, it can emerge naturally. Of course I'm not saying this is good, neither am I telling the sailors who I coach to use this strategy, but that's how it is. I think the most important is to have the RC protest every single contact with a mark, if no penalty is taken, and a proper rule 42 enforcement from the judges.