I can see what Itachi’s thinking by not spelling everything out for Sasuke and entrusting his fate to Naruto instead, but part of me did wish that he didn’t go for the roundabout approach with his misguided younger brother. Sasuke is still hell-bent on destroying Konoha and any attempts by Itachi to suggest that his death should’ve satisfied Sasuke’s thirst for revenge only has the opposite effect. To me that suggests Sasuke is just conflicted over how Itachi let him live and purposely fueled his hatred so that he would kill him one day, and can’t help but channel all that pent up rage elsewhere after finding out the truth. As such, Itachi is very much to blame for the path that Sasuke’s walked — something that he realizes in death didn’t work out as he had hoped — which is probably why he chose to leave it up to the living to decide what’s “best” for Sasuke now.
Incidentally, this is the first time that I agree with Sasuke’s standpoint more than Itachi’s, even though I understand Itachi’s good intentions. By letting Sasuke live so that he could atone killing his clan, Itachi has not only made Sasuke walk down a path of revenge, but a path of (seemingly) no return that he would not have taken on his own. While Naruto has a remote chance of bringing him around, it’s getting to the point where the only thing that Sasuke can do to redeem himself is to sacrifice himself to protect Konoha. When he’s in waist-deep working with Orochimaru/Kabuto and Tobi and waged war on other countries, it’s not like he just return to Konoha scot-free. Of course, I’m not opposed to the potential scenario where Sasuke lends a helping hand and remains a rogue ninja, but I can’t say that would have nearly as much of an impact.
As for that “other battle”, I actually like Madara’s arrogance since it more or less makes him the epitome of evil in the series. His arrogance will likely serve as the perfect setup for Tsunade’s “never say die” will of fire that was inherited from her grandfather and resparked by Naruto, so it has that going for it as well.