There is nothing wrong with taking the pawn in this position. Castling is almost never played in this position.
The e4 pawn in the italian

because i don't have the energy to think right now i'm gonna guess that d4 with ideas of playing Re1 later may be the idea since it is a common pattern in king pawn openings
After 4. o-o Nxe4 is Black's best move, I thought, anyway Emms recommends it.
5. Re1 in that position is actually bad... Black can answer with d5 and wherever White retreats the Bishop Bc5.
5. Nc3 sacrficing the pawn is the most common move in that position.
After the crazyish 5. d4 exd4 6. Re d5 7. Bxd5 Qxd5 8. Nc3 Black won't be able to hold the extra pawn, but it's not actually very good for White.
Why is it (because I assume it is that way) that black cannot take the e4 pawn in the italian?
Example: