I feel like they would lose though once the knockout round comes. Their defense is superb, I agree, but I still do not think it can keep a top-notch team like Spain or Brazil from taking care of business. Let's not forget, the Netherlands beat them 3-0 in Euro 2008.
Italy is a good team defensively and at keeping the scoreline low. Italy will not lose a game in the World Cup, however will draw some games and may end up losing the game in crucial playoff penalty shoot outs.