I've been thinking lately that perhaps a big part of my shyness is just a case of my general fear of failure. Certainly I have an aversion to doing things where I feel that I may fail, and sure that's absolutely common, but I imagine I may be worse than the average in this regard. (Maybe I'm used to being good at certain things, and I like the way it feels to succeed at those things and just subconsciously focus on doing only those things to maximize that nice feeling.)
I worked as a cashier at a grocery store for a year, and at Burger King for a year, and I never had any trouble interacting with people there. In fact, I was downright social in those jobs. For a long time I've wondered why that was, and my best explanation was that I was in the position of power in those interactions. Sure, you don't generally think of cashiers as powerful, but I'm the person taking the customers' money and letting them leave. In a very tiny way I controlled their destiny, and they came to me without me having to do anything.
But also in those cases, there was no potential for failure. Anyone even slightly competent can check out peoples' groceries or press someone's Whopper order into a register. Like any smart person, I was good at those jobs.
When meeting someone new for some kind of social reason, such as at a party or to ask them out on a date, however, there's a definite chance for failure. There are all sorts of reasons why a person might not be interested in you. The consequence of that failure is embarrassment.
I have a tendency to overestimate potential negative consequences. I don't have a fear of heights in quite the traditional sense, but I absolutely overestimate danger. I have no problems with glass floors, but I can't get near a ledge if there isn't a very sturdy-looking barrier. And I can get really uncomfortable around knives or equipment, even if I'm using those things correctly. My nature is to play things extremely conservatively, avoid all risk and uncertainty, and make sure that everything in my life goes according to plan.
So when I'm interacting with new people, I think that a lot of my shyness comes from that exaggeration. I delude myself into thinking that if I fail at talking to someone, the results will be emotionally catastrophic as if my whole family died in a house fire and it was my fault. Realistically, I do embarrassing random crap all the time, and that doesn't get to me, but the thought of walking up to someone that I like, smiling, and saying that I love their watch absolutely paralyzes me in terror. Maybe the key for me to get better is to first stop and assess that (lack of) risk logically and objectively—thinking about it just for a couple seconds should be plenty to remind me that I have nothing to lose.