I'd expect the PL to gradually get more dominant in Europe, given the money gap is growing. However, it's still relatively recent that so many were so rich.
Still, if we accept that teams aren't as good, there's probably a variety of reasons, for example...
Premiums for wages/transfer fees will mean the PL can attract plenty of good players, but it's likely that you only get a slightly better quality of player for a lot more money. Players from England are still the most used in this country, and I imagine that a typical Italian playing in Serie A is getting a lot less than a typical English player in the PL.
It's also likely that the 'big' clubs in other leagues can still attract players on lower wages because they can offer CL football.
I'd imagine that being one of the best teams in your league means that you're playing a style which wins games, and you're full of confidence. If you're Notts Forest, you might have more money than most Italian teams, but you're going into most games as the underdog each week, getting beaten regularly, and will be low on confidence. If you're used to playing defensive football and grinding out results, then playing a confident, attacking team, who have lots of experience in European competition is likely to be difficult, even if you have a more expensive squad.
Still, we also don't know what would happen to a Napoli or AC Milan if they were dropped in the PL, as they might find it much more of grind. Even in European competition they'd be playing teams of mostly a lower standard until the knockout of the CL. Last season Inter made it to the CL final by beating Porto, Benfica and Milan in the knockout stages.
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