I think its because mobs only a have a set amount of dot slots on them, so if alot of ppl are dotting it, other ppl's dots can dissapear, esp if its a certain type of dot that can only have 1 of them on said mob. Like for example, nin & war have a dot that increases dmg taken to mob by 10%. Only one of them is allowed at a time. So one of the two will dissapear. Hence why the more ppl u have, the more often this will occur. It's the only thing i can think of.

That said, I have the problem too and it would be nice if SE can adress this in some way, even if its just a msg saying ur dot has dropped off, so u know what ur dealing with.