Yeah there's no doubt this would be one of the consequences of Vatatzes Sicily. I could see a majority of the Latin speaking peasantry convert too, considering greek was seen as just as prestigious as Italian, and there'd be a government to encourage conversion to speaking Greek.I hardly see eastern Sicily ( and Calabria ) supplanting the rich cities of northern Italy as the cradle of the Renaissance (with their connections both with the east (Byzantium and Muslim countries and with northern Europe, let us remember that the concepts of capitalism and banking were born here)
I could see Vatatzes Sicily gaining ideas of the banking system from Northern Europe, they have to compete against many rivals after all, and I could see a two house system develop too, which would be very interesting.
I think Italy would just be seen as a place, and Naples and Sicily would deny an Italian national consciousness that would entail the conquest and Latinification of Naples and Sicily. There is no way the heartlands of the new Vatatzes realms would agree to it.it is more probable that it is one of the main places where it develops, surely we will see in northern Italy being more centered on the study of Latin as opposed to the south which reads and studies Greek, certainly the concept of Italianness (already in vogue in the fourteenth century) will stop here in Naples