A fair question to ask the dermatologist is what is the likelihood that the lesion is benign. Obviously they can be wrong and many doctors feel the easiest way to avoid being wrong is to remove anything remotely unusual. As you suspect of course this also helps the income stream. If you had a dentist who drilled every spot on your teeth you'd find a new one. Yes, decay can't kill you. But if you ask most dermatologists will give you an honest answer as to what kind of lesion they suspect, what is the likelihood it will be malignant, what the rate of progression might be with observation, whether coming back in 6 months to have it looked at again is reasonable. Except for melanoma deaths from skin cancers are rare.
Skin Cancer Facts - SkinCancer.org
About 3200 non-melanoma skin cancer deaths/year in the US with 3,500,000 Americans being diagnosed with skin cancer per year. So you can see the death rate is less than 1 in 1000 diagnosed cancers. This is not a highly aggressive disease (except melanoma).
A fair question to ask is, Are you worried about melanoma or a less aggressive illness like basal cell or squamous cell. Certainly those can be watched closely for a bit if it is so early that your experienced dermatologist is uncertain. Taking a good photograph at the first finding can be an excellent tool for judging progression.
Some patients would prefer to just get everything removed. But to answer your question, not every dermatologist removes everything. Pre-malignant is another word for not malignant thus benign. Some lesions are more likely to devolve into cancer. Any pigmented mole is higher risk. Any HPV infected tissue, and skin that was ever sunburned, etc.