Odoacer sent all insignias of the roman emperor to the eastern emperor Zenon and declared himself king of italy. Zenon was content with this because:

1. the expedition vs the vandals just failed

2. at the same time he had to fight an usurpation

3. he had problems with eastern goths

Odoacer knew that the eastern roman empire would rather accept this. If he called himself emperor of rome he would have risked a war. Since almost all of the former western Emperors had trouble to be legitimized in all troops, that risk was too high.

I do also think that the title King of Italy might be just as grand in the larger perspective, the reign reached until 1946.