Dairy is rejected by vegans and many in Paleo. Some consider it "your mileage may vary" (Kurt Harris). I've been examining the argument against dairy from both angles. Not surprisingly, the arguments against dairy are fairly similar (at least until you deal with animal proteins). Here's one area where the two camps might join forces! To summarize, here're the arguments against dairy. I've included counterarguments where there seem to be confusion or weak claims.
Dairy promotes cancer by increasing IGF-1 (Insulin like Growth Factor 1). IGF-1, like leptin, is elevated during puberty, but it should be much lower in adults. The dairy industry uses recombinant bovine growth hormone (genetically engineered growth hormone) to produce more milk. This hormone elevates IGF-1, which stimulates cell division and multiply cancer cells. Cordain mentions this in his first edition of "The Paleo Diet" (pp. 78-81). So do many cancer prevention groups: http://www.preventcancer.com/press/editorials/march20_94.htm . Three major types of cancer (breast, prostate, and colorectal) are all associated with elevated IGF-1. Also, IGF-1 accelerates aging: http://www.drmcdougall.com/misc/2007nl/mar/dairy.htm
Counterargument: is it IGF-1 or insulin? Elevated insulin is implicated in angiogenesis. If so, it may not be just dairy but high-glycemic carbohydrates, that is, grains and starches, including "safe starches" (white rice, yams, sweet potatoes). Indeed, Cordain makes this argument: "Many women ... have adopted vegetarian diets in an attempt to reduce their risk. Unfortunately, it may be that ... [g]rain and starch based diets actually increase the risk of breast cancer, because they elevate insulin -- which in turn increases IGF-1 .. A large epidemiological study of Italian women ... has shown that eating large amounts of pasta and refined bread raises the risk of developing both breast and colorectal cancer" (p. 79). So we are dealing with the familiar problem in epidemiology, where the association studied (dairy vs. cancer) may be warped by substitute, comfort foods (high glycemic carbs) consumed in the absence of (in addition to) the subject.
Cow hormones also promote cancer. Dairy accounts for 60-80% of the female sex hormone, estrogen, consumed from food. In a typical year, dairy farmers force cows to be pregnant via artificial insemination to produce milk 10 out of 12 months. In other words, factory farming has turned cows into "milk pumps", who are forced into a constant state of gestation and stress to produce hormone-filled milk. (This contrasts with the practices of herding socieities in Mongolia, where cows are milked 5 out of 12 months and only during early pregnancy.) As cows move to later pregnancy, even more hormones (estrogen, progesterone) appear in the milk. These hormones have been linked to cancer, especially prostate / testicular cancer: http://news.harvard.edu/gazette/2006/12.07/11-dairy.html . For example, dairy is linked to the emergence of prostate cancer in Japan: 50 years ago, there was virtually no prostate cancer in Japan. For men, milk and cheese consumption is strongly associated with testicular cancer: the rates are highest in Switzerland and Denmark, where dairy consumption is universal, and lowest in countries like Algeria, where dairy is not widely consumed.
Counterargument: Is it excess cow hormones or IGF-1 or insulin? It's not clear. Also, if it's true that excess cow hormones cause cancer, the same should be accorded to conventional beef and pork -- these are fed antibiotics and growth hormones so they can mature fast to be slaughtered early. Without growth hormones, the supply of beef and pork would fall, and the spot prices of live cattle and pork bellies would skyrocket. No one would be able to afford beef or pork, let alone grass-fed beef or pasture-bred pork. Also, you can drink skim milk since hormones reside in milk fat.
Dairy does not promote bone density or prevent osteoporosis by providing dietary calcium, as claimed. This is a myth created by the dairy industry. Bodily calcium levels are dictated by calcium absorption and calcium loss. IGF-1 and the above hormones have the effect of building bones for children and teenagers. However, the favorite vegan argument has been that animal proteins "leach" calcium from the bones, leading to calcium excretion. So the net effect is nugatory or even negative for dairy. What you need is calcium from plant sources (kale, spinach, broccoli, bok choy), which do not cause "calcium spills" and are net positive when considering both absorption and excretion. Also, Vitamin A in dairy can weaken bones. Countries that have the highest dairy consumption (OZ, NZ, Scandinavia) typically have very high rates of osteoporosis -- thus, dairy promotes net calcium loss or even lower bone density via excess Vitamin A.
Counterargument: This is where Paleo and vegan positions diverge. If it's high protein diets that cause negative calcium balance, then dairy isn't the sole culprit. Eggs and fish would be more responsible for this calcium spill than dairy, based on their higher protein content. A meat-heavy diet seems to be more responsible for higher rates of osteoporosis than dairy consumption, as countries that heavily consume dairy also heavily consume beef, pork, and poultry. Indeed, this is exactly the position of the vegan troika, T. Colin Campbell, Neal Barnard & John McDougall: http://www.news.cornell.edu/chronicle/96/11.14.96/osteoporosis.html . (What is the Paleo argument? Is "calcium spill" legit? Them vegans keep accusing our beloved Inuits of hobbling from osteoporosis!)
Dairy promotes autoimmune diseases, especially T1 diabetes, Crohn's, Ulcerative Colitis, eczema, psoriasis, and acne. Vegans have claimed that dairy promotes T1 diabetes. Cordain claims that T1 diabetes is probably caused by gluten, dairy, legumes or grains. The evidence against T1 diabetes is particularly compelling: early introduction to dairy seems to cause an autoimmune reaction that damages the islet cells in the pancreas, among those genetically susceptible. You end up not being able to make insulin endogenously. While there may be other triggers, dairy certainly seems to be one of those triggers. I have personally experimented with dairy by eliminating and reintroducing it. With a lag of some 3-5 days, dairy does seem to worsen my Sjogren symptoms. I was a heavy dairy consumer before all this (heavy Vit D pasteurized milk, cheese, ice cream, flavored yogurt, frappucinos, sour cream).
Conclusion: Dairy seems to be strongly "associated" with most commonly occuring forms of cancer. However, because of dietary lifestyles and the lack of rigor in epidemiological studies, it is hard to allocate blame specifically to dairy (rather than high-glycemic carbs or meat consumption). On the other hand, clinical (animal) studies do confirm the association between dairy and cancer (via elevated IGF-1), and dairy and autoimmunity (esp. T1 diabetes). The relationships seem to be stronger than mere "association."
Here, I agree with Cordain. There is enough circumstantial evidence. Dairy is at least allergenic and at worst cancer-forming. It took me a while to forego sour and heavy cream, but it seems wise to stay away from dairy if you have an autoimmune condition. You may not agree. What is your argument?
Edit: all of the above points (except #3) are covered in more detail by Pedro Bastos in his Ancestral presentation: http://vimeo.com/27671369 ; http://www.slideshare.net/ancestralhealth/ahs-slidespedro-bastos-8827808