to put it simply what may be unlawful in Italy could be within the law in Ireland and so they would choose to be taxed in Ireland leaving the Italian govement with a leagal problem that is heading in the direction of the very leagal foundation of the EEC if they decide to act against the company or individual.
A bit of a simplistic view, when it comes to legal stuff things are much less theoretical and much more practical.
Especially when they involve millions of euros.
There is a treaty called "Lugano Convention" which , to put it simply, defines which country has the authority over a legal case and therefore which law and legal venue applies.
Its content is pure common sense: if a legal issue arises then it will be handled in the country where the alleged wrongdoings were perpetrated.
If the Italians can prove that Ryanair has bases and operating crews based and living within their territory then the case will be held in Italy and according to Italian laws.
Here is more on the treaty, just to stay informed:
Texts: Lugano Convention and Protocols