I'd say there is LESS need rather than no need. Similarly, the PdG in Paris doesn't preclude the need for a StR in such a marquee city for such a marquee luxury brand. The StR Mexico City didn't preclude the beauty of also having the more boutique LC Las Alcobas, after all. The StR San Francisco doesn't preclude the nicety of also having the LC Palace Hotel, either.

Also, I doubt the service level at EG Milan is as good as that of the StR Florence (one of the highest rated StR hotels) or StR Rome. I've stayed at the EG and know better. So they aren't at the same level. The same level would include the Gritti Palace or perhaps the PdG.