I have noticed an alarming number of errors on this board, and I'm going to start trying to eliminate them so that people stop citing them as evidence for their theories.

The 3rd of these is that Hanzo of the Salamander was some amazingly awesome Shinobi. He wasn't.

Hanzo was a good ninja, no doubt there. And he had a great rep. But the more we've seen of him, the clearer it has been that he isn't anything special. The guys big claim to fame was that he fought evenly with the Sannin back when they were teenagers. This fight doesn't mean much though, because:
a) they were teenagers, who hadn't gotten nearly as strong as they would later. Tsunade didn't have her regen techniques for instance, Jiraiya doesn't seem to have Sage mode or the Rasengan (which hadn't been invented yet), Oro hadn't gone through numerous power ups from absorbing other host bodies, and adding their strength to his own, nor had he invented numerous techniques that would make him way stronger than Hanzo (like Edo Tensei). None of them seem to have had their summons available for the fight either (or were too tired to summon them). This brings me to the 2nd point,
b) We don't know the circumstances of the fight. For all we know the Sannin were exhausted from killing all Hanzo's men (see all the dead bodies visible in the fight?), and by the time Hanzo showed up they were in no condition to take him and his Salamander.

We're then left with a guy who lost to Mifune and ran away from kid Nagato, and whose name may have been "known by Shinobi all around the world", but who clearly wasn't as strong as readers of the manga first suspected he might be. There's no reason to think he could take any of the grown up Sannin individually, and dozens of other shinobi in the manga demonstrate clearly superior prowess. He's apparently useless when he isn't given time to weave signs either, meaning pretty much any decent Uchiha can own him (since they don't need their hands to use techs), just as they'd have owned Mifune when he tried to beat them with his "quick draw" sword skills. Indeed, lots of chatacters can do jutsu without seals (Rasengan, Oro's snake techs, Jiraiya's hair, etc). It's pretty embarassing really for a guy who was supposedly Kage level, but probably wasn't (unless you're comparing him to the lowest level of Kage possible, like Gaara's dad). It's also notable that he doesn't get put in the strong group, whose job is to hold off the armies advance, but is put in the crappy back-up ambush group. If Hanzo was that strong, Kabuto would have put him in the front lines with the resurrected Kage or Madara, which is where he'd be the most useful.