Salt has been recognized as essential to life just about as long as we have historical records. The land that became Israel was blessed with mineral salts, both rock salt cliffs and sea water that can be (and still is) evaporated into salts. In addition to the practical, everyday uses for salt, its significance and value is reflected in some important ways. It is included in the recipe given to Moses for the incense to be used in the Tabernacle worship, and the sacrifices brought for worship were to have salt added to them. (I wonder if the fact that salts add colors to flames may have been one reason for salting sacrifices?)
Salt is still used as a symbolic gift to seal a covenant or a relationship by the exchange of salt or sharing salted food. God's promise of the continuing kingdom to David and his descendants is described as a Covenant of Salt. The prophet Elisha's first miracle was anointing an unuseable well at Jericho with salt at God's command to produce sweet water; it is still a major water source to this day.
By the time of Jesus, the use of salt both in worship and in households was common. When Jesus described His followers as "the salt of the earth" they would have seen it as part of their traditional sacrificial system, as well as the common use to enhance and preserve food.
What we find odd is Jesus' warning about salt that has lost its ability to be "salt"; we wonder at how that could happen. We need to remember that much of the salt they had available was not the pure salt that we buy today; it was a mixture of various mineral salts. In some cases, the actual "salt" was the most readily soluble, and if it got damp, it could get leached out of the mix, not leaving enough available sodium chloride to do the job. The remaining mineral salts were often used on paths and roadways—makes sense, keeps the weeds and mud down. (Salts, in higher concentrations, makes land barren; there are recorded cases of conquered cities made uninhabitable by being “sown with salt”)
So if Jesus told His followers that we are like “salt”, what does it mean? Our lives should add savor to our communities; our presence should enhance worship; our lives should make a difference.