Surprisingly enough first hand witness accounts in quick, traumatic and dynamic incidents such as a plane crash are often incredibly wrong. It is a well known phenomenon in aircraft mishap investigations that a crash can occur without warning and happen so quickly that a witness can see a crash, then subconsciously add in details to fill the gaps. They may see smoke trailing or leaking fuel and 100% believe they saw an explosion or even flames where there wasn't one. One person can claim to hear a sputtering engine when another witness says they heard it at maximum power until the very end. It's not intentional or malicious it's just the mind adding details (speculation) when they are trying to help investigators but actually are leading them astray. So if a person in the ground minding their own business and in no danger whatsoever can miss or add details it is very reasonable that someone who is escaping a sinking ship in the dead of night, in the middle of the freezing Atlantic Ocean, who may be panicking at the thought of losing their spouse, family or friends, suffering from hypothermia, trying to recover survivors, keep a lifeboat from becoming swamped, etc isn't watching a sinking ship's every move whilst remembering it for posterity.

While I was looking for a source to back me up I found this paper on aviation safety (http://commons.erau.edu/cgi/viewcontent.cgi?article=1040&context=ijaaa) which actually cites a 2003 study on Titanic witness accounts. The TL;DR version is 90 witnesses testified at congressional hearings but since they were asked different questions and the breakup of the ship wasn't the focus of the interview only 20 witnesses were asked about that very subject. 15 of the 20 eyewitnesses interviewed gave statements that corroborated evidence of the Titanic breaking up on the surface. The authors attribute the 5 (and presumably others who also didn't see it) to poor visual conditions caused by the moonless night, and the fact that some lifeboats drifted/were rowed too far away to see the ship clearly. http://teachersites.schoolworld.com/webpages/jgrantz/files/titanic's%20final%20plunge%20by%20todd%20riniolo.docx

Here's a good article on the sinking of the Titanic (PDF File)

The gist of the article seems to be that there were a total of 82 passengers/staff that presented testimony before the two inquiries (US and UK) an of those 82 people, only 4 claimed that the ship sank intact, 13 provided statements that either were implicit or explicit in that the ship broke apart. The remaining people either were not asked, or did not offer an answer to the effect.

What I got from the statements that they saw the ship break apart, they were all within 1000'/¼ mile of the ship and, based on their descriptions, still mostly abreast to the ship. Only Hugh Woolner's testimony, at 150 yards from the ship, states that he did not think the ship broke apart. Most people heard explosions that could have been the bulkheads breaking way, or the boilers hitting the frigid water and exploding. One thing I found interesting from the reading is that the main assumption as to why the ship broke in two was that the propulsion system slid from the stern into the bow.

Now as for reasons for why the 4 stated the ship sank intact could be anything: distance, assumption or just not paying enough attention. The article I linked does point out that two of them were White Star employees and saying the ship fell apart would most likely have looked bad.

One thing I do know, looking a little deeper is that to see the ship do anything once the lights died, you'd have to be close. The only light that would have been out that night was the light of the stars. There was no moon, and even with your night vision adjusting, the middle of the Atlantic ocean would have been about as dark as any uncovered place on earth could be. There is reference to only seeing Titanic's silhouette or her outline.

I think its safe to say, that had she sunk in better light, even if it was just the light of a full moon, more people would have been able to see her break apart. But then again, perhaps with better light~~, and maybe a pair of binoculars,~~ they could have avoided the iceberg entirely.