Once a USB drive is write-protected, you cannot use it anymore other than as a read-only device. You can view files but fail to modify them. While this is effective in securing data stored in the device, it is also dangerous for when you forget the password you have set on the device. Also, if a data is encrypted, there is a risk for data loss when files are decrypted.
Encryption is a common practice for securing confidential files, especially those that are used in business. The data becomes safer because the files cannot be accessed unless the external device is plugged in a computer. Even then, access can never be gained if one does not know the decryption key to the file. If you fail to enter the correct key, or if you simply forgot the details such as passwords, data loss is an imminent possibility.