It literally is done to reduce sexual pleasure. Circumcision was popularized in the US as a way to stop masturbation, which doctors believe was responsible for various social and medical problems.

From Wikipedia’s bios on two of the people responsible for the spread of the practice, Lewis Sayre and John Harvey Kellogg:

> In 1870, Sayre began using circumcision as a purported cure for several cases of young boys diagnosed with paralysis or significant motor problems. He thought the procedure ameliorated such problems based on a "reflex neurosis" theory of disease, which held that excessive stimulation of the genitals (i.e., masturbation) was a disturbance to the equilibrium of the nervous system and a cause of systemic problems.

>Kellogg did promote extensive measures to prevent masturbation addiction. He circumcised himself at age 37. His methods for the "rehabilitation" of masturbation addicts included measures up to the point of cutting off part of the genitals, without anesthetic, on both sexes; he wrote men who did should be circumcised and women that did should have carbolic acid applied to their clitoral glans.