Imagine an American SaaS company that uses Cloudflare CDN to distribute their assets and tunnels their traffic through CF for DoS mitigation. That company has paying customers in Italy. If Cloudflare gets blocked, that company's software no longer works in that country. They have a choice between switching to a different provider (which will make Cloudflare lose money) and telling their Italian customers to go away (which they don't want to do for obvious reasons).
Considering how much infra actually relies on CF, Whether the Italian government would actually fight that fight is a different matter entirely. Sometimes centralization is a good thing.
IMO, a far more interesting question is what would happen if Italy asked CF to block some content worldwide.