I think the decline experienced by the Italian National Team also indicates the competitive level of Serie A. We realize that Serie A is also not as competitive as it used to be, this also indirectly contributes to the decline of Italy best talents. In fact, we no longer see defenders who have talents approaching the level of Bonucci and Chiellini in the Italian National Team defense, we also don't find players of the level of Jerginho or Verratti in the midfield, and the same goes for the front line. The Italian National Team looks like they have lost their golden generation, they clearly have to find a solution for this. In the past we saw Juventus, AC Milan, Inter Milan, AS Roma, Lazio players as the mainstays in the Italian National Team. Currently I think only Donnarumma can be considered a world class player in the Italian National Team.
This decline has not happened in one or two years it's all have long roots with Serie A is now one of the wired leagues which is having too many issues and these are preventing them from having strong structure for youngsters which give them good backbone.
In last 8 years, no World Cup while now things are indicating they can lose another time which could be worst every for them because now FIFA is going with 48 teams which are surely good advantage for the Italian team, but they are not ready for this as well. Top teams in Serie A are also responsible for this decline as they fail to attract domestic youngsters those can turn things into positive with recently mostly are facing huge finances issues which are also needed to be fixed if they are looking for better results in long run.