I agree with most of what has been said about how Fleet Rome is "bad for Italy" and "good for Austria". I don't have anything to add to the specific strategic discussion, but I just wanted to point out some historical context.
The invention of this variant, despite its (almost trivial) simplicity, is credited to Richard Sharp whose suggestion was influential enough in the early Dip circles to cause it to be widely experimented with. Sharp was the author of "The Game of Diplomacy", which seems to be the first and only published book on the tactics and strategy of this game.
Based on much older articles and discussion on the subject, it seems that Fleet Rome has been experimented with and dismissed as flawed by several much earlier generations of players that battled over snail mail and the first generations of "electronic judges". The variant certainly shifts the balance and dynamics of the game, but not in a way that seems to have positive effects toward improving balance or increasing strategic options.
It was well-known that Austria and Germany were Sharp's favorite powers to play. The flaws of his book painfully reflects this bias. While the chapters on A and G are quite good, those focusing on other powers really lack the same depth and quality. In fact, the chapters on Turkey and Italy are rather infuriatingly poor. With Turkey, he suggests that the power has no natural early ally and not much hope to make one. For Italy, he goes so far to suggest that Italy should accept playing for a strong second. It's almost as if the lack of quality in these chapters is a some extreme form of meta to discourage strong play by these powers, so that others (including Sharp) could have a better time playing his favorites Austria and Germany. It's not surprising that he invented Fleet Rome, as yet another "contribution" to the Diplomacy community to strengthen Austria (and indirectly others) at the detriment of Italy.
http://www.diplom.org/Zine/S2003M/Burgess/Rome.html
http://www.variantbank.org/articles/weak_sisters.htm
http://www.playdiplomacy.com/forum/viewtopic.php?f=16&t=17003
http://www.diplomacy-archive.com/god.htm
http://www.diplomacy-archive.com/resources/god/book_review.htm
http://www.diplomacy-archive.com/resources/strategy/articles/unbalanced.htm