In German adult persons are addressed either by the formal "Sie" or the intimate "Du" (children are always addressed by "Du"). This is similar in many European languages ( in French it is "vous" / "tu"). No such distinction exists in English, one always uses "you".
"Sie" is generally used to address people that you meet for the first time. This is a minimal form of respect and politeness, even a beggar asking for a coin is not addressed by "Du". And even if you know a person for a long time, it is quite common to stay with "Sie" unless you have close contact, feel sympathy and change to "Du". Relatives and friends are always addressed by "Du", higher ranking persons are addressed by "Sie".
Okay, things are changing in Germany and get less formal, but at the time when Remarque wrote "All Quiet on the Western Front" is was definitely not acceptable to generously use "Du".
Anyway, up to now the standard form to address an adult male person is Herr + surname ("Guten Tag, Herr Schmidt"). In fact, "Sie" and "Herr" are coupled. In the "Du" situation one uses the first name ("Hallo, Paul").
In some cases professional titles are used to replace the surname. It is completely usual (and perhaps an even more polite form) to adress a doctor by "Herr Doktor", whether or not you know his name. For example, you can address your family doctor by "Herr Dr. Schmidt" or "Herr Doktor". In a hospital one would probably use "Herr Doktor".
And that is the whole "secret" when Paul said "Pardon me, Herr Doctor". Perhaps he did not know the doctor's name, but even if he did, it would be absolutely standard not to append the surname. It definitely has nothing to do with his special situation.
But why does the German "Herr" occur in the English translation? Simply because the phrase "Herr Doktor" has no adequate translation. Using "Mr. Doctor" would sound very strange (however, an English example is "Mr. President"). Perhaps "Sir" would be not bad, but at the price of omitting the title "doctor". I therefore believe that the translator deliberately left the German "Herr" to emphasize this special feature of the German language. Admittedly, it needs some explanation ...
This "title" phenomenon often occurs when higher ranking persons are addressed. Here are some examples:
- Herr Professor
- Herr Pfarrer (priest)
- Herr Major
- Herr Inspektor
The borderline is certainly fluid, but you would not say "Herr Straßenfeger (street sweeper)".
The use of "title addressing" was (and to some extent still is) extremely widespread in Austria. It could happen that strangers addressed you by "Herr Direktor", even if they didn't know anything about you.