Starting a conversation is much easier when you have a reason to think you have something to talk about with the other person. I too find it difficult (and generally, also fairly pointless) to engage random strangers on the street in conversation, but have found on the other hand that tech meetups, volunteer opportunities, and alumni events have a relatively high chance of producing interesting conversations, especially once I've established an "anchor" group of friends and peers within a particular community.

You may also want to consider the context for the conversations when trying to determine the reason that they die out. There was an article posted here some time back on the subject of "acceptable settings for flirting", which wasn't all that informative, but did hammer on one key point: people's degree of receptiveness to conversation with strangers depends largely on context. I.e., someone sitting by him or herself in a bar or coffee shop may be a bit more open to chit-chat than they would be when sitting at a bus stop, or having lunch in a cafeteria.

Basically, you should rely on favorable settings (parties, departmental mixers, sporting events) and implied social ties (academic cohort, shared professional interest, friends in common) to get your foot in the door, then try out your best lines, rather than expecting your wit alone to forge a new relationship.