Even if hairy people were less susceptible to skin cancer, behavioral preferences altering clothing styles and time in the sun would probably dominate. If you assumed that these preferences weren't genetically based at all I guess you could argue that hairiness still could have an effect. Or generally that it could have an effect within those that like not wearing much clothes in the sun. Either way you get to the issue of cancer often not killing people off until long after they've had kids. Actually it could be argued that extreme social fixation on certain physical attributes could lead to selection against hairy people - at least hairy backs are typically considered unattractive. I still think mental attributes are the ones to be most selected for since we have so many physical crutches and in the end choice of mate is a very psychologically guided process ... Though there certainly is some level of selection for eye colors people deem attractive etc.
