If an interface is internal, all its members will be internal to the assembly. If a nested interface is protected, only the subclasses of the outer class could access that interface.
Internal members for an interface outside of its declaring assembly would be pointless, as would protected members for an interface outside of its declaring outer class.
The point of an interface is to describe a contract between a implementing type and users of the interface. Outside callers aren't going to care and shouldn't have to care about implementation, which is what internal and protected members are for.
For protected members that are called by a base class, abstract classes are the way to go for specifying a contract between base classes and classes that inherit from them. But in this case, implementation details are usually very relevant, unless it's a degenerate pure abstract class (where all members are abstract) in which case protected members are useless. In that case, go with an interface and save the single base class for implementing types to choose.
