There is a mild obscuring of your question, as to who believes their genitals to be undesirable.
If you had meant women thinking that, it would be due to the fact that it rarely comes up in any media, or with any real mention, and there is largely no standard by which to compare, which leads to some insecurity. Additionally, where it does come up, beauty standards (however vague) generally suggest that female genitals should have minimal exterior appearance.
If you had meant men thinking that, it seems to be that beauty is defined as being smooth and sleek. A penis and the accompanying testicles are neither of those. They are bumpy, irregularly shapen bits of anatomy, and current standards of attractiveness are against anything irregular.
Hope that helped.