You very definately can have too much pitch, & it can do bad things to your engine.

As you increase pitch, the engine revs will fall (there is only so much torque available to turn the prop), but the engine works harder despite the lower revs. If the load is sufficient, the revs will fall out the bottom of the engine's usefull power band -- you will make much less power than previously & less power means less speed, climb etc. The increased load will push engine temps upward -- even to the point where the engine can seize if the load is severe enough. Additionally, the higher combustion pressures resulting from the overload, will increase radial thrust loads on the crank bearings (or bushing), increase shear loads on the crank pin and increase side thrust on the piston. None of it good. Even if you don't have a catastrophic failure from overload, you will be shortening the engine's life. It is every bit as bad as sustained high revs.

In terms of flight performance, you can easily have situations where a flatter pitch prop will give you greater level speed & much better climb than a steeply pitched prop. You read about pilots who claim that their .46 LA runs fine on a 10-8, or 11-7 prop, or even in one case I saw -- a 12-7 !!!! Too bad for the poor engine -- & too bad for the pilot who is only getting a fraction of the performance available from that engine.