Erherm. Freedom of Speech.
Plus, its a game about the MAFIA. The MAFIA is an Italian body. OF COURSE THEY'RE GOING TO USE THE STEREOTYPICAL MOBSTER AS A BODY FOR THIS GAME. (when I make a point in all caps, I usually imagine myself writing the opinion on a 2x4 and hitting people upside the head with it to make them learn it).
And, to be honest, Italians arent the only ones "rampantly stereotyped". They arent even stereotyped that often anymore.
Look at women and black people. First off, women are shown to us as sex symbols, thats it. Look at any game in your game library, unless you only own Half Life 2, I would be willing to bet 90% of your games that have a female as a main character just has her there for sex appeal (unless thongs are strategic battle equipment. And Bras arent.)
And black people. Look at the sandbox crime genre; most of them revolve around stereotypical gangsters, with the black gangsters especially stereotypical. Need I say it too, but glare at a TV or listen to some rap; those are all stereotypes (I think its funny that most rappers who rap about their "street life" and "street cred" actually have degrees from colleges).
Hell, Ive seen more stereotypical latino characters in media recently then italians: the last stereotypical italian family I saw was Everybody Loves Raymond (ironically, a show I dont understand how people can love).
Let me put it to you this way. If you exist on the planet earth, with a skin color, some form of media will stereotype you. Period. Get over it.