Lol, that's a great one. Um well in todays culture we are expected to be many things. Women are expected to flat stomachs, large breasts, and to be curvy at the same time. With guys it's not as superficial but it's still expected that he will have muscular body. Now it has been apart of popular culture that men need a bigger penis to please his women. You see for guys it's more about pleasing his woman than him having an orgasm. So a larger penis is something that gives ya bragging rights about who can give it better to his girl (ie: guys bragging that they made her scream and such).
Other than that yes it's a contest (testosterone does that) and it's a little bit about insecurity too. Kinda like peacocks displaying there feathers (although it would be so wrong for guys to do that with their penises)
I think some guys want to show their "Alpha-male" dominance in order to prove they are the best mate for the girl they are interested in. I think the rest are either liars or insecure. Ha ha - sorry guys - no offense!