It is my understanding that some forms of cancerous cells extend their own telomeres, so having stem cells with shorter telomeres is not a defense against this. In any case, wouldn't the cancer be the result of damage to the coding DNA or the intercellular environment anyway, and not a function of telomere length?

The telomeres are there to ensure that the cells with more transcription errors die first. But in the case of aging, there are no younger cells for this die-off process to prefer. Given the choice between a certainty of cancer and cells that cannot even reproduce, some people may roll the dice with cancer, and hope they can live long enough to overcome that problem as well.