It's harder than you'd think to pick a truly woeful Italy XI. Prior to the late 90s, selecting a strong squad was rarely a problem.
The pre-eminence of Serie A, and the league's focus on home-grown players, coupled with the fact that most international sides played far fewer games, meant that Azzurri managers didn't have to worry about squad rotation or searching far and wide to find the best players. Italy's best clubs were all full of brilliant Italian stars, so all that was left to do was pick the XI that suited best.
In recent years, that's changed, and it seems there's always some qualifying game or meaningless friendly for teams to deal with. The league's different, too, and the country's best talent is no longer so easily found.