A prior version of the rules required C to protest in the described situation.  The removal of this provision makes it clear third parties are not to be involved.  It is clear that failure to enforce the rules is unfair to the rest of the fleet.  How does C know that the starboard boat hailed "cross" wishing to remain on Starboard and nor wanting to risk a lee bow tack and the resulting disturbed wind?  That is why it is left to the two boats to enforce or ignore the rule.  Fair sailing requires that the rules be enforced if a boat is hindered in its progress.  The third party is free to ask the parties what happened and why a protest was not asserted.

The preambles are rules, see the definition of Rule.  However, the BASIC PRINCIPLES are not a preamble to Part 1.  Rather, they are a separate section of the rules and act like a "vision statement".  They outline a basic philosophy of what our sport is about.  They define an expectation of what we are supposed to do.  However, you cannot be penalized for failing to meet an expectation.  Rule 2 is a rule a boat can break and be penalized for that embodies what the BASIC PRINCIPLE represents.

In the case you describe, rule 60.1(a) allows C to protest both A & B for breaking rules 2 & 10 (and any others that they think may have been broken).  It does not require C to protest.  It is then up to the Protest Committee to decide which rules, if any, were broken.  What C saw may have been the result of B waving A across so that B could continue to the left side of the course without having to deal with A tacking into a leeward position.  These are the facts that the PC will have to determine to decide which rules may have been broken.

There is no rule that requires a boat to protest another, even if they think a rule may have been broken.  Rule 60.1(a) starts with "A boat may..." (emphasis mine).  It is not "shall".  So the notion that B would be found to have broken rule 2 by not protesting is a stretch.

A boat may 

Its still there, If boat C saw the incident, and it was clear that A and/or B did not take a penalty immediately, then C may protest as fair sailing dictates (hence the "saw the incident" is still in the rule)
However, C is not obligated under the rules to do so, Ie cannot be DSQ for not protesting. Certainly sounds like A and B may need a little protest time to understand the basics.

Interestingly years ago we were winning a National title and were protested by a boat that apparently "heard" us and another boat bang each other rounding the top mark.
With all the video evidence, and no one else hearing or seeing the alleged incident, the Protest committee dismissed the case, as there was no audible bump, the 2 boats were close but never touched, and there was no additional movement or looking around among the crew or skippers.
In the end I believe it was simply a tactic to upset us as we were the 2 leading boats in the regatta, and both teams were there for evidence till after midnight. Only the skipper of the protest boat was present. In hindsight, given the evidence and the facts, the Committee should have gone after the other party for a Rule 2 violation, and the protest should not have been continued in the first place as soon as the protestor admitted they didn't SEE the alleged collision, only thought they heard one.
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Geoff, you bring up 2 separate issues here:(1) "saw the incident" and (2) inferring a PC "should have gone after the other party for a Rule 2 violation" for protesting.

"Saw the incident"

Above you talk about the word "saw", but not much time on the word "incident".  An incident encompasses more than the single instant in time.  In the case where the incident involves 2 boats rounding a mark very close abeam, the incident includes the moments just before and just after contact might have occurred.  Though the sound of 2 boats colliding might be evidence of a RRS 14 breach, there will likely be other rules such as RRS 11, RRS 16 or RRS 18 which might have been broken as well.

So, Boat C doesn't have to be in the precise position behind the boats to see the collision (actually see the hulls touch) between the 2 boats to have "seen the incident".  As long as Boat C was able to see the boats rounding closely, heard what she believed was contact, she's within her rights to protest and to “allege” one or more boats broke a rule of Part 2 or RRS 31.  Also note, citing the rule(s) which may have been broken is not a requirement prior to the hearing.

" ... the Committee should have gone after the other party for a Rule 2 violation.."

As far as Cases go, we have Case 47, where a boat on port yells "Starboard!" at another boat.  In this case, it's easy to establish that the starboard-hailing boat was actually on port at the time of the hail and that could possibly lead a PC to conclude that the boat did this intentionally to rattle and confuse a competitor.  

However, in the scenario of Boat C stating she saw Boats A and B very close in a mark rounding and believes she heard a collision, I think Boat C would basically have to admit that she knew there was no rule breach, lied about the sound or knew the sound was not from boat-on-boat contact and intentionally protested only to rattle Boats A and B.  Or, maybe Boat C was overheard bragging at the bar to another boat about this strategy and a witness comes to attest to that.

Other than that, RRS 60.1 says a boat may protest for an "alleged breach" and the protesting boat does not have to be specific about what rules might have been broken until after the hearing has started.