I think he seems pretty passionate about Argentina and playing for them so it is not really a question anymore for Italy. That said I dont think Italy are on their way out... they need to play a regular team that will build chemistry but they have a few excellent players and just need to find the right system and get used to playing with each other like a club team. The reason the 2006 world cup team was so good was they all knew how to play with each other so well as well as being very talented.
With guys like Marchisio, Verratti, Bonucci, Romagnoli, Chiellini, Rugani, Berardi, Balotelli, Rossi, Candreva, Darmian, De Sciglio, Vazquez, I think the Azurri could put together a very competitive 11. Especially if it starts calling up Allen from Napoli to play in a 3 man mid with Marchisio and Verratti. I think that would be one of the best midfield trios internationally to go with the good defence. For attack I would simply play the most talented guys (Trio out of Rossi, Balo, Berardi, Candreva and Vazquez)and assume they could score more often then guys like Eder or Immobile .. who Conte seems to like. I know people will slate me for saying Balo and Rossi given the injuries for Rossi and attitude issues for Balo but to win a tournament you literally just need a guy to be healthy and motivated for a month. I would rather have those guys on the pitch then not.
Obviously the current team is lacking the quality upfront but it only takes one of 2 star forwards to come along and change that. Berardi could be the guy and they still have Balotelli and Rossi. Maybe Insigne or El Shaarawy could become more consistent if they stay healthy.