This is a tough situation. I think you are taking too much of the blame. Since your wife has said that she had this sort of problem in the past with others, I think you have to see that a lot of the breakdown in intimacy is coming from her side of the marriage. It sounds like this might have happened with anyone she might have married.

If you just look around, even a little bit, you can find lots of examples of people - men and women - who are nothing special to look at, or be around, who have mates that love them physically. Also, the sexual chemistry that people have when they are new to each other wears off eventually for everyone. Then the bond has to be based on something deeper. People who expect that initial excitement to last forever are the ones who keep going from partner to partner. That's what happens in Hollywood. It's all about the initial magic. Then that can't be sustained.

You have a confidence problem, but your wife has every bit as serious a problem as you do - more so, I think. It takes work to keep seeing the beauty in another human being after the initial novelty wears off and the ton of faults becomes known. You wife seems to just not know how to do that work. I, too, recommend couples counseling. If she won't go, maybe you could just go yourself, in the beginning, to get moral support.