Then he contradicts it by saying that Hashirama's strength was fabled like the Sage of the Six Paths.
It's really just open to interpretation. If we believed everything even Kishimoto wrote, then Sasuke would be dead due to this....
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Kishimoto wrote that Deidara killed Sasuke right? It must be true!
No, Kishimoto gave characters something I call "Character Opinion". Meaning that even in literature, not everything written by the author is known to be true. It was in Deidara's opinion that he killed Sasuke because as far as he was concerned, nobody could survive his explosion.
It was also in Kabuto's opinion that Hiruzen was the strongest of the five Hokage and strongest Kage in his era. Why do I believe that Hiruzen is greater? After much research and more knowledge, and then around 3 years later (time skip was two and a half years, not sure how much time elapsed since the start of Part II) he has more knowledge and information. Hiruzen was purported to be able to use all the techniques in Konoha, that would include Gentle fist, Amaterasu (depending on when Itachi defected), and various Kekkai Genkai. If there weren't such contradictions against Hiruzen, then I would say he is the greatest. But I don't see it.
