I lived in NYC for years and saw dicks all the time in public. It is a real problem, and very good reason to shoo away even potential creeps.
Is it a problem? Yes. It's a problem for them; they were very clearly unwell. Was it a problem for me? I didn't really know how to react as a kid, and more than anything else I remember being sobered rather than traumatized by what I saw. If anything has maladjusted me, I don't think that was it.
These kind of quality of life things are naturally fuzzy subjective and individual.
This is puritanical shit. Seeing a penis will not hurt you.
Thank you for making me laugh the hardest i have all week.
Assume that it does no damage. Even in that best-case scenario, the majority of people will still remove themselves from such an environment.
Can you blame them?