I can't answer why we forget our past lives. They say, as far as to what I have read, that the birth process is so terribly painful, so scary, so painful, that it shocks the brain into forgetting everything. Now, also they say that when beings die in the heaven realms, the way that they die is always so shockingly painful that it erases their total memory. So if a person gets reborn in a human realm from up above, they have a terrible way to die and then a terrible birth as well. If we are reborn from being a human to a human we may or may not have a terrible death, but we still have, according to what is written, a terrible, frightening way to be born.
Now, if you have never been around a birth, think about this: take who you are right now and squeeze yourself inside a kind of big, elastic bubble type of thing filled with fluid. You are really squished, you are as tight as tight can be, there is no more room to really kick and whatever, you are filled up, stuck in this darkness, whatever. And then you are sucked, you are more or less getting beat on, and then pushed out a little hole that often squeezes your head and twists it, and then you are finally out and it is freezing! It is absolutely freezing and not only that, but all of a sudden your skin is surrounded by air instead of the fluid that you were used to for 9 months. This can be an extremely frightening situation, if you think about it for yourself right now.
So what can we say for a little baby being born? According to Buddhism, it is a very traumatic experience. Because of this trauma, they say we forget everything from the past. In real life, this does occasionally happen, people who have had traumatic experiences have developed what they call in English, "Amnesia". They totally forget things. It is a real process that happens in normal life for some people who have had very, very traumatic experiences. In that way, we can logically think that if rebirth is true, then this same sort of process can happen; and it is so traumatic that we forget our past.