You bring up a couple of interesting points.

Ok, first the less important one. If there is contact that results in damage or injury that is obvious to the boats involved, then the requirement to hail and fly a flag do not apply to a boat intending to protest. It sounds like the damage was small and not obvious in this instance, but one can still file a valid protest when a boat or person gets hurt.

Now for the more important point. As you said, the other skipper might tell a very different story. It's not uncommon for the parties in a protest hearing to honestly give completely irreconcilable accounts. Part of the judge training is to understand that neither person is necessarily misrepresenting the facts - the've just seen them differently. At a judge's workshop once, the speaker told of a protest where the jury wrote up the facts as "two boats, sailing in different regattas, on different bodies of water, both on starboard tack, and both to leeward, made contact". Really, the hardest part of hearing a protest is figuring out what actually happened. Applying the rules is easy in comparison.

That brings us to part of the purpose of a protest hearing. It's an opportunity for both sides to get together and explain their view to an impartial listener. They also get to see the other party's perspective. People often walk away from the hearing with a broader view of the incident and a better understanding of the game. Don't get me wrong - a lot of people leave unhappy as well, but at least they've had a chance to be heard. A hearing can go a long way to reducing rancor on the beach (or in the bar). Resulting anger tends to get displaced onto the committee members, who eventually develop thick skins. Just last Saturday, after I lead a starting rules and tactics seminar at a local club, one of the attendees cornered me and complained that he was still upset with me for disqualifing him in a hearing that was so long ago that I don't even remember it anymore.

Regards,
Eric