Back in the days of Rome, the Roman soldiers fought well. They were brave, organized, had great strategy, etc. They won all the battles and in fact, the good performance of the Roman soldiers actually contributed to the collapse of the Roman Empire, given how the Romans won so many battles that there was simply no more enemies to beat and no more peoples to enslave.
But then you notice a very significant decline in the Italian perfomance of war. The States and city-States that inhabit the Italic penninsula haven't won any war since the days of the Lombard League. The defeats include battles against Kingdom of Greece, Ethiopia, Albania, Serbia, etc.
What happened to the Italian military performance?
Your concept of viewing history is severely messed up. You're being anachronistic, you're projecting the modern day onto the past like everything was exactly the same and directly connected. Italy came into existence in 1861, before that the last time that geographically it was one, was around 1500 years before that and that was something different than modern day Italy. North Italy had been for the majority of that time under the rule of the Holy Roman Emperor, Central Italy under the rule of the pope and South Italy had been under the control of France, Spain, Byzantium, Arabia, Normandy etc. It was even practically an accident that South Italy was added to North and Central Italy during the unification as that wasn't originally the point. Even now there are groups in Italy who wouldn't mind it to have the agrarian, less prosperous south to be cut off. There have been many frictions with the more prosperous, industrial north. And all of this has squat to do with the Roman armies of old.
When Rome was just a city, then they probably used their own soldiers. But the larger their territory became, the more they started using the armies of the conquered lands. A Roman army was an army that fought for Rome and the soldiers and generals came from all corners of the empire and beyond. There is even a joke among historians saying that the Romans couldn't create anything themselves nor that there was such a thing as a real 'Roman culture' as they simply took everything over from existing cultures and assimilated it together. They did exactly the same thing with their soldiers, they stuck everyone together. Near the end the entire Roman army was under the control of German generals and their soldiers were Germans likewise.
Roman citizenship evolved and expanded throughout the history of Rome. In the end everyone within the borders of the empire was a Roman. Many Roman emperors weren't even from what is now Italy and the Eastern Roman empire succeeded in surviving an additional 1000 years...without Rome and they never stopped considering themselves Roman and then I'm not even mentioning the German and Russian emperors, who considered themselves Rome's heir.
Also Rome did not had any shortage of enemies. No idea where you got the idea they had none anymore, how the hell did the Germans took it over then? August tried to make a more northern border, but his armies failed. Trajan conquered a part of the Middle East, but that was soon lost after his death. The Romans were very well aware of Alexander's exploits and they knew about th Silk Roads. It's still unclear as how much they exactly knew about the lands far outside their borders, but Roman coins have been found as far as Vietnam. They definitely knew there was more.
There are many theories as why the Roman Empire fell and one of them is the 'Imperial Overstretch'. It simply got too big and succumbed under its own weight. This gives rise to the paradoxical statement that when they stopped conquering lands, it started going downhill, however that was definitely not because they had a shortage of lands to conquer or enemies to fight. Also they didn't won all their battles, far from.
What happened to the Italian military? The Italian military is not even 200 hundred years old and were never that impressive. What happened to the Roman armies? They conquered the bloody world as most of what would become the colonial powers were once a part and/or fought for Rome and between those two periods they mainly used mercenary groups which came from all the corners of Europe and they only served as long as they got paid. Like hell that they were going to risk their own population. There's a reason why the Vatican Guard is called the Swiss Guard. At the time it was founded, Swiss soldiers were considered the best mercenaries of Europe.
Your question is simply wrong from the get go. The Italian military from the last two centuries is something completely different altogether than the Roman armies and the Lombard League, there is no straight connection.
