Animals don't seem to care whether they have their balls or not. My male Jack Russel Terrier, when he came back from the vet's, seemed more intent on pulling out his stitches and treating the wound if anything.
It's really only people who seem to attach self-respect to a pair of gonads.
Besides, my dog seems to do just fine. I've heard people argue that they should be able to enjoy sex, but in all reality I don't see such a big deal about it. Especially considering the alternative. After all, we already have a major overpopulation problem, along with the problem of poor genes in our domestic pets. I won't touch on that now.
Oh, and I believe you mean neutering. Castrating refers to the removal of all associated organs, iirc.