Some Italians occupied Corsica.

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It would not have alleviated the economic disruption from war with Britian, and later with the US and USSR. Neither would it have changed overall the losing stratigic situation of the Axis from late 1942. While the German may have thought everything was still ok a large part of the Italian population thought otherwise, as they watched the economy slide and their enemys close in.

Last there is the question of how many high quality German corps that would free up. By 1943 the Germans were establishing many third rate units for garrisons, so replacing those with Italians might actually be a step downwards.

Carl,
I know that Italian units were really pathetic at times, but saying they were worth less than a unit made of German kids and their grandparents, I don't believe is accurate.

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Weapons are cool.

As in any army, the quality of Italian units varied significantly. The best - the elite professionals - were probably as good as anyone else's best, but the general mass of conscript troops did not fight well, mainly because they were not very interested in the war.

For them, the war wasn't a question of national survival (like Britain) or righting perceived wrongs (like Germany), which encouraged those nations to fight hard. The Italians had been friendly with the British for a long time (and fought alongside the allies in WW1), and after Dec 1941 they were even less happy, because they liked the USA and had many connections there due to immigration. OTOH, they didn't particularly like the Germans.

Basically, it was Mussolini's adventure - he led, but most of his army didn't really want to follow.

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Tony Williams: Military gun and ammunition website

Yes I was not at all clear there. Easy to take that one the wrong direction. To clarify: imagine replacing a German 'Static' or training division with a Italian infantry or motorized infantry divsion and sending the German unit off to fight in Africa, or the eastern front. That is send third rate Geman units off to replace the Italian motrized divsions in Africa or the Itlaian army on the Don River, would be worse that keeping th Italians in the fight.

Then they would be Germans and not Italians......

Well, they would probablly still speak Italian...

The Italians sure had their problems, but their lack of decent weapons is a glaring one to me. Of their entire assortment of weapons, not one of them would compare to the corresponding rifle of another country. Their designs were deeply flawed, and were often weak or broke easily. Good leadership is required to be successful, but if the Italians had some better weapons, certain individual, devoted units could have been more productive. It is hard to be successful when you are outgunned, and impossible when you are outcommanded, outgunned, and your economy is a failing system not meant for war.
I have a hard time giving the Italians the edge in any catagory, over any of the participating countries of WWII. With a better prepared Italy as Hitler's right hand, the axis could have gained complete control of Europe, but the Italians were so far from being a military power, that realistically, I think Italy never would have been capable of being a powerful ally to Germany and Japan.

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Weapons are cool.

Better prepared?
Then the war might last a little bit longer than it did. In a world war what really counts is industrial capacity. How well can you train an army of rifleman to fight an army of panzers?
If the German war industry was better prepared. Then the armies could withstand enough catastrophes until lessons were learned and better decisions were made.

The Italians who held Keren, the gateway to Ethiopia, showed that Italians in well prepared positions could fight as well as anybody, their small red concussion grenade took a lot of casualtuies in the attacking units, however in the Egyptian campaign at the start of the campaign the Italians in the Omars camps were in ill prepared positions where large gaps in the wire were not mined and so when 4th indian division attacked them they simply sent the tanks in through the gaps and followed up with infantry, again the italians fought hard when they retreated out of Benghazi and bumped the roads block set to stop their escape, it was only the fortuotous arrival of some british heavy armour that took the fight out of them otherwuse the blocking force was in danger of being overran (taken from r.l.crimps book Diary of a desert rat that deals with this as he was one of the blocking force men)

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It was proper we should wear eagles upon our shoulders, for only birds could have reached the heights we did or visited the lands we did.

Thank you raj-rif, a perfect example of pockets of fierce Italian resistance.

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Weapons are cool.