This perception issue is why most guys don't have a good idea how big they are. Sure the majority of guys on this site have actually measured their cock (at lots of stages). But I don't think that's what MOST do. (I do understand that "most" is a statistically oriented statement, and I cannot really say it without data). So, how we see ourselves when we look down at the urinal or shower and how we look in a mirror are two radically different things.
It reminds me about how most of us feel when we hear our voice on tape the first few times. It sounds nothing like the voice we think we have because we always hear our own voice through the bones in our head AND through our ears. It's a distortion as to how we sound to most people. The voice on the tape is closer to what others hear.
Telling ourselves we're closer to what we see in the mirror or picture, or closer to what we hear on the tape is a fine exercise. But better still is embracing what we see and hear in those situations, and working on changing what we can change.
I know there was a guy at my gym whom I thought was built so awesome. I sometimes stared at him in the shower, not lusting (ok, maybe a little), but more admiring. He was about my height, and within a few years of my age, but he looked a helluva lot better than I did. So I was really studying him to see what I wanted to achieve. When I mentioned him to another guy I know, and told him I thought that guy had the total package--looks, build, endowed, everything--he went to look. He then came back and said to me, "Yeah, he's definitely got it going on. But, man," he said, "you're no slouch either. Why do you think guys cruise you in the steam room and women flirt with you upstairs?"
That was an ego booster for sure, but I still set my sights on looking like the guy at the gym, or at least my version of a better built me that resembles him. I think those external goals are good for us.