Hashirama's policy includes the use of might to enforce peace. This doesn't differ from the Indra's stance.
Of course Madara became an extremist, extremism is bred from extremism. The end goal of Konoha was to wipe out the Uchiha. Madara saw that coming decades before it actually happened.
Hiruzen and the village elders were also architects of the Uchiha genocide.
Sasuke left the village do to his lack of care for others? What a load of absolute bullshit. The village (who were responsible for the genocide) had no intention of prosecuting Itachi. This forced Sasuke to take matters into his own hands.
This is a load of bullshit. Hashirama himself acknowledges to Sasuke that Madara was right. The village system (which is Senju at its foundation) breeds more hatred. In the end the will of fire is a selective principle; in the end the village had no problem trampling over others when it was convenient. The will of fire is a complete sham.
As I stated before, the Uchiha cooperated 110% fully with the Senju mandate. They were driven into a prison and put into a position in which hatred for them would only increase. Hiruzen could changed this position, but was also unwilling to give power to people who were directly responsible for the foundation of Konoha. The Senju (yang) are power hungry, there's no way around it.
Without the Uchiha, there would have been no Konoha. The sham that is the will of fire is built off the blood of Uchiha who cooperated even when they were treated like garbage. No one else in the entirey of this manga have cooperated despite being treated like this. No one.
Hashirama used power to protect, not power to enforce. Madara was correct in that the leaf was heading in an incorrect direction against the Uchiha. He was not correct in his actions, however. Due to Madara's actions, Hashirama had to protect the Leaf from him, meanwhile Tobirama became even more politically justified in his actions and secured his future Hokage title. Madara then led an extremely selfish life afterwards, plotting to rid humanity of its free will with IT. Hashirama made a mistake, but he was not evil. Madara's actions however, were.
Hiruzen didn't agree with the solution of Genocide, he only mobilized defenses in the possibility of the coup. Danzo is at blame, not the system. Hiruzen wasn't exactly in a position to remove Danzo from his position, and it is unlawful to kill him. As for giving power to them after all of Tobirama's policies, that would take time. Not only that, but giving power to a section of the village that is planning a coup, is not in the best interest of the village. Hiruzen was in a difficult place.
And yes, Sasuke is extremely apathetic and uncaring towards anyone. He could have worked his way up through the ranks and eventually dealt with Itachi as a member or leader in the Leaf, and possibly eventually uncovered the truth of Danzo and the elders still. He didn't have to be so harsh to his best friend neither, there were better solutions at every point to his path.
Tobirama and Danzo do not represent the Leaf, and Hiruzen and Hashirama did what they could, but had the mistake of inaction whereas men like Tobirama and Danzo took action.
The Will of Fire is everything honorable and ethical within this manga. The Uchiha lacked a strong leader after Madara abandoned them which is why they were never represented. Obito later abandoned them as well, and by the time someone like Shisui could have led them, the Uchiha were already planning a coup.
The "Curse of Hatred" claimed its victims. Madara dug his clan deeper into a hole because he resorted to violence early instead of figuring out how to come to a compromise. Sasuke made his life more difficult because he chose to fight his friends in search of vengeance, when he should have searched for leadership within the leaf. Obito gave up being Hokage because he followed Madara.
Characters like Tobirama and Danzo going unchecked combined with violent responses from the Uchiha clan members led to this. Admittedly, Will of Fire leaders were prone to inaction, however, they never intended for the Uchiha clan to be wiped out.
Hashirama would have focused on a long term plan with Madara, had Madara not decided to leave and lead a life of violence. Madara abandoned his people who needed him and allowed Tobirama to politically move uncontested.
There are faults at both sides, but the violent responses were not justified nor in the best interest of the Uchiha Clan.