they do just fine with internal testicles.

I will admit, I don't know much about bird testicles. But looking into it for 5 minutes suggests that there seem to be more significant streamlining concerns for aquatic and flying animals than normal ground animals, and the different convection for being suspended in water / moving quickly through air suggests to me that it might be easier to do temperature regulation if they're internal (as might come to the mind of any man who's gotten into a cold pool).