Yes, for some reason everyone thinks it's okay to make jokes about small cocks. I've heard them at the gym by guys who are well aware I'm hung like a chipmunk. Heck, I'm right there, naked! The same at parties. Though usually not naked!
In the movies, how many times have I squirmed through the scene where the mean high school jock or snobbish, rich class president is disclosed as having a teeny weeny. Porky built a franchise out of small dick jokes.
One of my favorite movies is Notting Hill. Even in this sweet comedy, there's a small cock joke. At a restaurant, a guy crudely calls an actress a slut to his buddies, without realizing the actress, played by Julia Roberts, is sitting at a nearby table. She gets up, crosses to their table, and says she bets he has a small penis. "Enjoy you dinner, fellas!"
It's always kinda tricky hearing these type jokes in a movie when you're with a woman you've been intimate with. Do you laugh or not? Same at the parties. As others have said, whatever you say will be an admission of having a small dick. On the other hand, sometimes it's a nifty way to out yourself!