As the novel says, Carlo was punk sore at the world because he felt the Corleones had shunted him aside with a small bookmaking operation and had not given him one of hte houses in the mall.

But I am surprised that Vito allowed his wife to get beat up. I don't really understand that on Puzo's part unless he was trying to set up Carlo's betrayal. But keep in mind that when Connie asked her dad if he ever hit momma, he replied "She never gave me reason to." That is not very reassuring, is it?