So, what have we learned, and whould would win an all out fight?
In the beginning of this battle Sauske had an incomplete Magekenyo Sharingan, if the one he used against Madara was even his to begin with. And to top it off, Sauske was still recovering from his fight with Itachi.
I have to say, either way you look at it, Sauske would have won this battle. I think there is only one reason, and one reason alone that he didn't: He was trying to capture KB, not kill him, and regardless of the mindless input from Suigetsu, this makes a world of difference. KB didn't have to worry about catching Sauske, he just had to kill him. This is a much more simple and straight forward task.
I will even go so far as to say that Sauske could have beaten KB even without Magekenyo Sharingan, if he had just been out to kill him.
I will take it one step further, and piss off a lot of people, and say that he more-than-likely could have killed Itachi if Itachi hadn't had his legendary armor.
Sauske was being held back by his need to capture KB, there were no such strings involved with the aitachi fight. Sauske was out for blood. That new Ninjutsu of his utilize lightning itself. Sauske knew he needed something faster than Itachi in order to beat him (I would say Itachi is the third fastest ninja in the series if you count Minato and Madaras space/time jutsu as raw speed), and no ninja can out run lightning. Period.
So if KB and Sauske ever met up again, all he would have to do is use that technique and it would be a one shot KO.
You might say that this, especially combined with his Magekenyo Sharingan, which I think is more perfect than Itachi's, as Madara predicted it would be, makes Sauske to powerful. I would say you're right, and you're wrong.
The question is: too powerful for who?
I think that with these two fights, Sauske VS KB and Sauske VS Itachi, we are starting to see Sauske become more of an even match for Naruto so that he may once agin, some day, reclaim his rightful place as antagonist. I actually think Sauske has a little bit to go before catching up with Naruto, especially when you consider that wind nature is strong against lightning natured ninjitsu. Sauske has been favoring lightning-nature ever since he learned chidori, and we haven't seen a whole lot of fire from him.
Now on to a few other points:
I think Sauske chose his team carefully, and he was well aware of each persons unique abilities. It is unclear to me weither or not he set them up soley for the purpose of tracking and taking down Itachi, but it seems to me that there is more too it.
Karin: Chakra sensor-type. Ale t sense chakra at long distances, track it, and predict its next movement. She also has the ability to heal a person by allowing them to 'suck' her chakra.
Suigetsu: Ninjitsu water-element type. Possibly able to use the 'Water Release' skill that the second Hokage was famous for. Skilled swordsman, fairly strong.
Jugo: Originator of the 'Cursed Seal' Kekkai Genkai. It appears he is unable to reproduce the seal on others himself. Posses shape-shifting like abilities. Exceptionally strong. Able to give his flesh and chakra to those who can handle the cursed seal in order to heal them, but it appears that doing so puts him in an extremely vaulnerable 'child-like' state.
Add in Sauske's skills and you hve one heck of a team lineup.
I know I promised to make a Madara/Itachi theory, but I am pretty tired. This analysis took longer than I thought because there was such a treasure-trove of information in the fight with KB. I will get to it tommorow, if I have the time. Sorry.