Several reasons:
1. The mortality rate is far, far higher than the flu. The seasonal flu killed between 0.05% and 0.1% for 2019-20. The estimates of COVID-19 range from 1% to 3%.
2. COVID-19 can be spread before symptoms show up.
3. The flu is generally limited to about 10% of the population, in large part because the population has some immunity. Nobody has immunity to COVID-19. If COVID-19 spreads unchecked, it could run through 30%-70% of the population before herd immunity causes it to slow down. That has the potential to kill a lot of people.
4. Rapidly ramping cases will easily overrun healthcare resources, resulting in a higher mortality rate than otherwise would occur. The difference between 1% and 5% could be due to sick people not getting the required treatment. They are already rationing some resources in Italy and are prioritizing some people over others. That's a fancy way of saying they are letting old people die.
It isn't the flu.