Well, as no one knows how old the Mushroom Kingdom is, the Shy guys may have been Toads in the distant past, separated, and became a completely different species. Maybe, even, it was a Toad that was banished from a clan, and forced to wear a mask to hide his shame. Others may have joined him for whatever reason, and they began their own group, all wearing masks in memory of that first banished Toad. Outsiders not knowing why they wear their masks may have thought it was due to shyness, and dubbed the species Shy Guys, as their gender is difficult, if not impossible, to distinguish. Over time, with different living situations and diets, evolved to their body structure that they have now.