I must admit, on a hunch I had always just presumed the waters in the harbour would be unpleasant due to the amount of shipping, but, a casual bit of research tells quite the opposite story.
The Marine Conservation Society has Dover Harbour beach listed as Recommended on their Good Beach Guide, and both DDC and DHB (yeah, I know) report on water quality is very good.
The Blue Flag status, which would cost £800 just to apply for let alone undertaking actions arising to achieve status, is not based on water quality alone, but encompasses beach facilities, toilets, refuse disposal and other factors. It is with some of these that Dover may fail, hence possibly the reason no application has been submitted. For example, provision of lifeguards is a mandatory requirement.
In fact the guidelines as to water 'toxicity', i.e. for the whole of 2010 the number of faecal particles per set volume of water is well within the Bathing Directive Standards guidelines, and registers very well. (No figures available for 2011 yet). Dover would not therefore fail to qualify for a Blue Flag on water quality alone.
If anyone really would like to know what criteria qualifies for the Blue Flag, and form their own conclusions as to why Dover would not achieve it, check the link:
http://www.keepbritaintidy.org/Programmes/Beaches/BlueFlag/EnglishCriteria/Default.aspx