With a best-case scenario (form and fitness) there is enough talent in this Italy team to be competitive. At the moment there are just a lot of injuries, and others who are trying to find form, fitness, or game time.
Depth:
GK) Buffon, Sirigu, Perin, Marchetti, Padelli, Mirante
DC) Barzagli, Chiellini, Bonucci, Astori, Ranocchia, Rugani, Ogbonna, Rossettini, Acerbi, Gastaldello
DR) Darmian, Abate, De Silvestri, Maggio
DL) De Sciglio, Pasqual, Criscito, Moretti, Antonelli
MC) Pirlo, De Rossi, Marchisio, Verratti, Poli, T. Motta, Florenzi, Montolivo, Romulo, Parolo, Aquilani, Bertolacci, Soriano
AM/F) Candreva, Cerci, Bonaventura, Giovinco, El Shaarawy, Insigne, Giaccherini
FC) Balotelli, G. Rossi, Destro, Immobile, Zaza, Pellè, Gabbiadini, Osvaldo, Okaka, Matri
Looking to the most promising U21 selection not already involved:
GK) Bardi, Leali, Scuffet, Cragno
DC) Romagnoli, Goldaniga, Antei, Masi, Barba, Bianchetti
DR) Zappacosta
DL) Murru, Biraghi
MC) Baselli, Sturaro, Cristante, Benassi, Cataldi
AM/F) Berardi, Bernardeschi, Mastour
FC) Belotti, Bonazzoli, Rosseti
The above are all classed as promising or very promising, maybe even 2-3 world class potential in there. It's important that Italy bridge this gap now, because currently there is a dearth of mid-20s players of quality around the Nazionale. This can't happen again.