I would go out of my way to affirm his manhood in any way I could think of to teach him the truth that manhood is a condition of the heart, not body.
Well said, Pexman!
As I man, I know how much a man value's his own penis. I would never belittle any man to his face over this size of his dick without reason. A man's muscles/body does not symbolize his masculinity in the same fashion as his penis. Belittling a man's penis size to his face outside of a sexual context would indeed be overwhelmingly insulting, provided the insult was not well-deserved.
That said, we cannot control what turns us on sexually. If you have a big dick fetish, you have a big dick fetish (admiring big dicks, showing off your big dick, etc). Some men love women big tits and find themselves unable to get excited over a small-titted women. Same would apply to small-dicked men. That doesn't mean that in a non-sexual context, a small-dicked man or small-titted women has any less value as a person.
In general, what is acceptable in a sexual context is usually not acceptable in a non-sexual context.
Finally, I'm now going to now play devil's advocate. Why is OK for society to overtly express their repulsion for obese people with little persecution in return? But, if society were to overtly ridicule flat-chested women or small-dicked men to the same degree, there would be a real backlash. You would immediately hear responses such as "a man is more than his dick size". Where are my moral philosphers?
But again, in a non-sexual context, I'm with Pexman on this one (unless I am in competition with some dude who's giving me a hard time LOL).