Everyone would be happy, except Sasuke would have no motivation to get stronger, Naruto would have no special skills, be brutaly murdered in the chuunin exams by Gaara. Hiruzen would still be singled out and killed by Orochimaru, while Minato would be sneak attacked from behind at the start of the invasion. Even if Naruto and Sasuke did survive, the Akatsuki would then show up, and now that both the Hokages are out of the picture, the leaf village gets burned to the ground.
EVERYONE DIES.