For the third consecutive occasion Italy will miss a World Cup finals after last week's playoff defeat in Bosnia.
Speaking to RAI, former Germany coach Klinsmann said: “They are paying the price for a lack of leaders, technically gifted players, and confidence in young talent.
"In Italy, Lamine Yamal and (Jamal) Musiala would probably be playing in Serie B to gain experience."
Klinsmann also was critical of the tactical approach of Italian football: “Tactical culture also presents an obstacle.
"Many coaches, even today, work with the objective of not losing instead of wanting to win at all costs. And these are the results.”
He added, “I suffered a lot with my Italian friends from Los Angeles. The night after the game I had trouble falling asleep."