Closed fist striking isn't encouraged in real combat because of the possibility of breaking one's knuckle(s) during a strike. If you make a fist and look at the back of your hand, you can kinda picture how bones go from your wrist to the knuckle, 4 bones, one for each knuckle. These can break if your knuckle smashes into something a little too hard, like someone's skull. The knuckle itself will push back towards your wrist and the bone will snap or shatter. You may see a bump where the broken bone protrudes out, along with swelling. This is known as a "boxer's break" and once this happens, it may have a tendency to break over and over in the course of future fights. It seems more common in the pinky bone more than the other 3 knuckles, but can happen anywhere. Of course, getting something like this set at the doctor could cost thousands of $$$s, depending on how severe the break is. Many fighting disciplines will stress hitting with the index and middle finger knuckles, as opposed to the more vulnerable pinky and ring finger knuckles. An example of this type of striking can be seen in many Royce Gracie fights, where Royce hits primarily with these two knuckles. In boxing, the gloves worn are to protect the hands as much as the other fighters. In MMA events, the smaller black gloves you see the fighters wearing don't do much to protect the other fighters, they are there more for knuckle protection. On the street, many people would rather not risk any chance of breaking their knuckles (and limiting their fighting abilities due to an injured hand) and limit hand strikes to open palm strikes and such. Many fighting disciplines don't teach close-fist striking because of this possibility.
Hope this answers your question, rough2!
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