Yeah, he's not going to walk into a club that is as deep in debt as Milan are. He would no money for squad improvements, and I don't think Italy would suit him.
If he were interested in Milan it would be due to their commitment to rebuilding through youth. Not sure if that interests him more than only taking the reigns of a ready made contender like an Ancellotti etc since he does walk to the beat of his own drummer. . .
Serie A isn't that great of fit at the moment for the pure Tiki-Taka style of Barcelona, as Luis Enrique discovered, just due to the extreme patience on defense of the mid to lower teams.
However, I'm sure how much that style works for any team without Xavi --even Barca -- and not sure how married to it Pep would be. His last Barca team at times seemed more like Luciani Spalletti's 4-6-0 champaign football than Spain's NT.