Swimwear for men has followed male fashion in general and there seems the be an almost reverse-Victorian trend in the last few decades where women's exposure has increased and men are expected not to show as much skin.
When I was growing up in the 70's and early 80's, shorts were almost unisex in both length and fashion. It wasn't till about the 90's I noticed the length began to increase no doubt caused by the Michael Jordan/basketball, hip-hop and surfer trend and unfortunately has showed no signs of abating to this day and now seems pretty baked into the culture of acceptable male fashion.
This was very evident a few years ago when I tried to find a pair of new bathing trunks for an upcoming trip to the beach. Around that time I had been heavily dedicated to lower body work and wanted something that would show off my efforts. Every single brick & mortar store only sold pairs that were mostly below the knee, with only a few just barely at it. None were above it. Only a few online websites that seemed more geared for a gay or European clientele seemed to offer anything close to what I was looking for (and similar to what I wore when I was younger), but they were both expensive and I didn't really have the time for shipping , especially for something that I was only going to rarely wear. I ended up having to buy a regular pair of cheap jams that were slightly below the knee.
Why that is I think is varied. A lot has to do with what I and others have mentioned in that fashion dictates it and what began with the trend of basketball/rapper pants and boardshorts has become the standard now and there really has been no big effort or demand to change that. In fact it's become so ingrained as to become ridiculous without question. I've seen guys with shorts so long as to barely qualify as such and only showing an inch or two of bare calves it makes me wonder why not just wear regular trousers?
Another reason has to do with what was already mentioned as well, is male modesty. Although I think there has been a subconscious effort with society in general to deemphasis male bodies and sexuality (while increasing women's), a lot of it also has to do with men's individual insecurities as they (and Americans in particular) have become more overweight and out of shape while being bombarded with images of the "perfect' male physique (no different than what women had to go through for a long time). Although I am not personally interested in seeing other men's bodies, even I do admit it might be for the best some remain covered up. Seeing as how most guys in my gym ignore lower body work, I would not want to be subjected to the image of their chicken legs practically all the way up to their inseam.
I think the final reason has to do with the fact very short pants or swimwear has become more associated with gay culture; a fact born out by most of the websites where they were sold at. I think this has become such a given stereotype that again, unlike when I was growing up, most straight men would no longer be comfortable wearing anything that is of a length similar to what women wear no matter their physique or modesty level. Even if not worried as being perceived as gay, at most I think others would judge such a man as at least of a bit of a perv who is hoping others might get a nut flash.
Given all this, I see no possibly this trend will change in the near future at least; a fact that I for one lament. Of course as you mentioned this is my opinion for trunks above the knee only. As far as speedos and their ilk go, then I would not be so keen on seeing any big change as I would neither wear or want to see anything that emphasized genitals in public, either on men or women.
