Nearly every Jewish male has underwent circumcision at 8 days old, and they have gone on to lead productive and very fulfilling sexual lives.
Many Muslims do it as well. That is probably hundreds of millions of people right there.
Plus we have hundreds of years over which to know if such a procedure had adverse effects and the incidence rates.
I agree with you that if these people were all atheists then they should probably refrain from physically altering their children. But since they believe that this has huge ramifications for their child's life as a Jew, and if you read the Bible you can definitely see why, telling them that they must stop this practice is equivalent to an attack on their whole religion. And specifically the Jewish religion, given that it's not obligatory for Cheistians and many Muslims do not regard it as obligatory.
I should also point out that Jewish men on average seem to have successful upbringings and lower incidence of drug abuse, failed marriage etc. than tons of other groups. And Jews have been around for millennia. So arguments that something is more moral or less moral are subjective. There are families of different types and traditions and beliefs. The health outcomes of this particular practice have been empirically shown not to be worse on average than the opposite.
In today's world, we are constantly figuring out what leads to more or less moral outcomes long term for society. 100 years ago, women couldn't wear bikinis to the beach, now we have lots of freedoms. We now have no-fauly divorce. Today, sexuality is everywhere, the family structure has deteriorated compared to before, divorces are up, many people have sex and don't stick around to raise the child, McDonalds is on every corner, obesity and depression is up etc. Is this better? Well, who knows, but we know that some systems have been stable and successful for millennia. Calling them immoral (from an atheist point or view) also carries the burden of showing our system to be more successful and to have better outcomes.
Finally, in our system, liberal progressives are totally fine with far greater mutilation as long as a child feels that they are of the opposite gender. Why doesn't the same argument apply to make them wait until they are 18 or 21? Studies show that most children who feel like the opposite gender change their mind after several years regarding transitioning physically. So why right away submit them to permanently changing into a transsexual? Yet the same progressives who argue against circumcision would argue for gender reassignment surgery.