Caste followers have a lot of undue social advantage over the oppressed groups (like in any other form of discrimination). Admitting that it exists would be the first step to giving up those undue privileges. It's perhaps that subconscious bias that leads them to 'caste denial'. People from most upper castes will swear that it doesn't exist outside of rural and uneducated areas of India. But ask someone from the lower (oppressed castes) and they will tell you the very many innocuous-looking ways in which caste based discrimination is meted out to them. Caste is never mentioned - but the treatment follows a predictable caste pattern. People in US are unlikely to hear these stories because a large population of Indians there are the wealthy privileged ones. So, these denials backed by anecdotal evidences should be taken with a lot of skepticism.