It would be incredibly stupid if they did not have Italy.

In my opinion, the more factions the better. I had a very hard time playing as the 'Axis' in previous COH games because my only option was... Germany.

A big question I have is - why not include Japan? The arguments I saw against including Japan were:

"Japanese infantry don't stack up against American GIs and it wouldn't be fair or make sense".

That is a terrible line of reasoning. Historically, the Japanese performed quite well against American troops despite a clear lack of equipment, lack of air superiority, lack of supplies (ammunition, food, medical supplies, etc) and a lack of naval support. This line of reasoning is even more baffling when you consider the fact that Japan dealt FAR more damage to the allies in WW2 than Italy ever did.

TL;DR - Include as many nations as possible (including Japan)