This topic fascinates me. I was the more modest one back in my day (HS 80s, College 90s) and now I pretty much don't care; in fact, I'm a little irked at the guys who nearly fall over doing the surfer-change (e.g., under the towel) in the locker room.
Also, I was introduced in the last decade to the Korean spa, where the nudity in the wet area is required by protocol (no fabric in any of the pools). I find myself VERY irritated at any guys who try to use it as a gay bathhouse (e.g., attempting to make physical contact and/or play with themselves openly) and of course policy is that any such behavior will get you kicked out . . . not that the policy is enforced - and this is where environment plays a huge role; some of the K-spas in LA are basically bathhouses; others are not.
I think I said something like this in the other thread, but I enjoy being naked with my friends, gay or straight, without having anything consciously sexualized about it; and I don't want that experience intruded on with sex; go to the bathhouse for that. But it's the rare young guy who's comfortable in the K-spa, for all the reasons you guys have listed, I suppose. Having said that, most of them that I take for the first time are like, "It was uncomfortable for about 10 min, then I got over myself and it's no big deal."