[The movie's Wikipedia entry][1] says this regarding her casting:

> Three candidates, Jennifer Beals, Demi Moore, and Leslie Wing, were
> the finalists for the role of Alex Owens. Two different stories exist
> regarding how Beals was chosen. One states that then-Paramount
> president Michael Eisner asked women secretaries at the studio to
> select their favorite after viewing screen tests. The other: the
> film's scriptwriter Joe Eszterhas claims that Eisner asked "two
> hundred of the most macho men on the [Paramount] lot, Teamsters and
> gaffers and grips ... 'I want to know which of these three young women
> you’d most want to f---'".

Most likely the makers of the movie didn't mind her lack of dancing capabilities, figuring they could "solve" this by using stand-ins. Most important were her looks and (to a lesser degree) her acting capabilities.

[According to this website][2], 

> Catherine Mary Stewart of "The Last Starfighter" fame auditioned for
> the role: she is a trained (classically) dancer and singer. **It was
> cheaper to hire Beals and the three others (and not give them credit)
> then it would be to hire her.**


  [1]: https://en.wikipedia.org/wiki/Flashdance#Casting
  [2]: http://www.fast-rewind.com/making_flshdance.htm