To be fair, she didn't say "You have a small dick." She said, "You have small dick energy." It's not great, but it's also not the same thing. It's a play on the notion that anyone can have "big dick energy" whether they actually have one or not. This is something that perhaps her generation is more comfortable with than older ones are.

You're right that we shouldn't equate a man's worth with the size of his penis, but in a patriarchal world like the one that Tate lives in that does, it was a real zinger intended to hit him where he lives.