The stories of Italian incompetence with reasons of equipment and leadership in Greece and Africa are well know, but the common counterargument was, that they atleast provided a distraction for the Allies while Germany did its thing.
But now with Husky underway Germany gets distracted as well, and also the last few years showed in my opinion, that Africa was mostly a very good training ground (and morale booster) for British and American forces.
Without having the North African battles, a successful Normandy or Southern France landing seems unlikely at least any earlier than in our timeline.
It seems having kept Italy and with that Greece and likely Yugoslavia neutral would have been better for Germany, even with less slave labour and distraction for the Allies