[EDITOR: I think the answer is, We don't know, but...]
Years ago, the distinguished British experimental psychologist, Donald Broadbent, together with his colleagues, developed a model of human attention in which he introduce the concept of a limited capacity channel. His group claimed confirmation of this idea after the results of dichotic listening experiments: play two different messages simultaneously through headphones and ask the listeners to monitor one of the messages and repeat its content. If in the unattended ear the message changed from English to German, the listeners did not notice--the attentional channel could not handle both messages simultaneously.
However, the situation proved rather more complex than this. If the listener's name was introduced into the non-attended message, attention was switched to that ear. So even though the information in that ear could not be reported, somehow and at some level the input was being monitored. You can experience this when you are in a crowded party: you can attend to what a person is saying to you and ignore the hubbub, but if your name is spoken, you will turn to find out who spoke it. You may not find this reply entirely satisfactory, and you may know that orchestral conductors appear to be able to listen to different sections of their orchestras simultaneously. But attention is a complex phenomenon and hard to understand.
Learn more about hearing at the Human Interface Technology Laboratory at the University of Washington in Seattle, WA.
Although we don't know for sure, we assume that this is purely a result of limited processing power - the human brain simply can't process everything at once in fine detail and something has to be selected at the expense of everything else.