When I try to combine two pdf's, it asks for a permission password and says the documents are protected; however, I didn't put any protection/security in the documents. I assume it is a default security under the enhanced security settings of the Acrobat Pro XI which I recently purchased.
Acrobat (Pro or Standard) does not apply a "default" protection. It appears that someone or some other process has applied protection.
Check permissions on each PDF that you want to combine (File->Properties->Security) and look whether any of them has permissions applied.