Well, first off, most women I've ever known have not been good at estimating the measurement of most anything. Most women seemingly haven't had to develop good spacial skills. Try this -- spread your fingers as wide as possible and ask a woman how many inches across your hand is -- you'll hear everything from 3 to 12 inches (FWIW, the average adult man's hand spans about 8 inches -- and no, it has not correlation to cock size).
Second, I doubt most women spend much time actually examining the cocks of their partners, so they aren't able to make accurate estimates of size. How it fits in her mouth or pussy doesn't give her much reliable information on the subject.
Third, my wife and I were once was involved in a 4-way with another couple, friends from college. The other woman decided she wanted to measure my cock and compare it to her husband's cock. She measured mine first, using a ruler. She measured the underside, from tip to who knows where (anus?), and came up with 9 inches. Being about 6.5" X 5.5", naturally I kept my mouth shut and enjoyed the ooh and ahhs.
However, her husband was so intimidated that he wouldn't let her measure his cock, and instead took the ruler and went into the bathroom to do it himself. When he came out, he refused to tell us how long his cock was, but I suspect he measured on top, from his pubic bone to the tip, and got a more realistic measurement, probably between 5 and 6 inches (my wife said he was in fact smaller than me). He was the sort of guy who probably didn't know much about the subject, and the results sent him into a deep funk. (He did develop a drinking problem after that.) I never told him because I really liked fucking his wife, who was a maniac in bed.
Good times!