[deleted]
The short answer is no, Latin is not just an outdated version of Italian.
The long answer is that Italian is simply one of the vernacular languages if Europe, if the one most apparently tied to Latin.
Even during the height of the Roman Empire, vernacular languages were used outside Italy. These included the predecessors to modern Spanish, German, French, and English. Latin influenced all these languages, but its influence on Italian is more apparent because a large amount of the Italian vocabulary is very similar to Latin. In fact, many words in modern Italian are essentially the ablative forms of classical Latin words (generally, this means the -us ending is changed to -o, as in the Italian amico and Latin amicus, both meaning 'friend').
However, even though the vocabularies of the languages are similar, Italian and Latin have very significant grammatical differences. For example, Latin has no article (the/a/an), while Italian does. The Italian for 'the leader' would be 'il duce' (Mussolini's title), while the Latin equivalent would be simply 'dux'.
As for why Italian developed, it is significantly different from those other vernacular languages because it developed directly from late Latin rather than simply being influenced by it. After its development, it followed the trend of other vernacular languages in Europe replacing Latin as the widely used language of its region. But it has had nearly a thousand years to develop and is by no means just a modernized version of Latin.
Sources:
http://www.pimsleurapproach.com/resources/italian/articles/history-of-italian-language/