Actually atrophy due to disuse is not restricted to muscles. In fact penile shrinkage happens to those with restricted blood flow to the penis in general such as those with atherosclerosis. As such the corpus cavernosum which expands with blood flow during erections will go into disuse. Penis actually starts to decrease in size after about age 30 anyway as do the testicles. Neither are muscles.
As for the notion that "millions" have been on finasteride and you haven't seen studies showing this is not in itself evidence. The reason is that it is simply not the focus of the research and most of the studies have not been powered to look for that. There is however research on the effects of genital size and finasteride. For example, very recently animal studies have shown 25% reduction in genital size (the rat is the animal model used for human urogenital research):
http://www.ncbi.nlm.nih.gov/pubmed/22375859
Studies are important but they most often lag the anecdotal reports by years and even decades. For example, when Prozac came out, Pfizer reported sexual side effects in the range of 3%. Most SSRI studies today continue to publish those sorts of numbers. The American Psychiatric Association and psychiatrists now recognizes sexual side effects to be as high as 40-70% on that class of antidepressants (and now studies coming out of persistent sexual dysfunction after discontinuation). The problem lies in how the study is designed and what exactly they are looking for. Drug companies will actually ask the survey questions in a way that generate the most favorable profile. For years they were also saying that Zyprexa did not increase weight any more than other drugs in the class. They had reps going around calming doctors down who had noticed it and had complaints from patients. Other reasons were always given for the weight gain such as you are not exercising, maybe you are eating more because you feel better, people put on weight as they get older, etc...Finally after 15 years the NIH (US gov't) did the largest study ever done (and least biased as no pharm companies were involved) comparing most of the drugs in the class and the results showed dramatic weight gain, increased blood sugar, increased bad cholesterol of the drug relative to others in its class, and so on. So, penis size and finasteride has not been the focus of the research. Very important point: Pharm companies do not fund or sponsor studies designed to show their drugs cause disturbing side effects and the government (with dwindling research monies) sponsors clinical trials with more serious health implications than penis size shrinkage. There are however reports on hair loss/propecia forums now where young guys are reporting this penis shrinkage (though often chalked up by others as paranoia or anxiety).
The urologist I sought out is a well known and well published Doctor at an academic medical center, so his clinical observations over two decades with the stuff is useful information. Again I am not convinced it is permanent and feel that once erectile function and libido normalize, the tissues will reengorge and maintain a different tone.
For the record, my thread is not designed to bash finasteride or to have it removed from the market. I think if you use the drug, it works for you, and does not cause the problems mentioned, then the option should be made available to you. But if you are in the camp that feels that everyone who reports (remarkably similar) problematic experiences with the drug can be always explained in other ways, then you may also be making an erroneous conclusion. I am here to benefit from others experiences with the persistent side effects and what they have done to regain function.