And I'd like to steer this back to the same period as the initial question and ask a "Why Not?" question of my own. It seems obvious to me that Hitler's weakness would always be the Med. Italy was soft, and he knew it. Why the hell didn't he say, "Screw You" to Spanish neutrals (who owed him), steam roll them, and then (literally if need be) bury the tough nut that was Gibraltar? With control of the Herculese Straight, backed by Luftwaffe and the Vermacht, he would've had control of the Med (take Portugal too-Swiss or Swedes don't like it? threaten them). And then North Africa becomes an easy gain. Then you REALLY hurt Britain's supply efforts. Then you can focus on all of the Atlantic as it becomes the sole route for Britain to supply herself. And with sub bases in Spain as well as France, you could really have England on the run.
The only answer I can think of is that he was a) delusional enough to believe that peace with England was still possible (improbably after the Battle of Britain) or b) that he decided to ignore England and focus on Russia (I think the latter, and misguided optimism, is what happened). True, the threat of English attack was minimal (on its own), but the possibility of England cutting off Germany from the Med was very real. And it happened. And, after provoking Russia, I think it was the #2 reason for Germany's demise (with the US's direct involvement a distant 3rd).
But if they'd taken Spain (and Portugal), they would have had a huge gain in the Atlantic, and would have also insured the continued flow of precious war material (including critical fuel) from the Med. They also might have been able to free up Italian troops given that they were protected by the Germans at Gibraltar. Then, and only then, might Germany have had the faintest hope of beating Russia. Probably not, but certainly much more likely then when they left Britain to build up its invasion force and its control of the Med and Atlantic.
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