It shows off the muscles more with lights - if you have a hairy chest/stomach your sixpac is going to be less emphasised, and lets face it Vince is more into the superhero comic book look than anyone else. I also think it may be the sanitation aspect. Being inside the ring with your head stuck in someone's hairy, sweaty chest isn't exactly something that would turn me on.
Now pull out your own body hair by force and now imagine that during a match (pulled out by mat or pulled out during moves by the opponent).
Remember the fact that most have to shave regulary (except for gimmick related reasons)and to take an awful lot of showers.
They shave armpits, legs and even the crotch -> main reasons = Aesthetics, security and hygiena
I suspect it comes out of some of their bodybuilding backgrounds. In bodybuilding competition, having your legs shaved can show more muscle definition than having them be hair covered. So +2 points for aesthetics.
Now, because this is wrestling and no one is being judged to try to win a competition, I think it's just something that stuck around out of habit for the bodybuilder types or much like swimming, general acceptability within their world.