He admitted to it because Jiraiya was a Sannin, something that is fallible since Itachi negged a Sannin. This automatically invalidates Itachi's statement. In addition to that, after Itachi retreated, Kisame questioned why Itachi had to escape with his power implying that Itachi could've won, but didn't due to over using his eyes.I'll say again, so you think Itachi < Jiraiya because he also admitted the same exact "inferiority?"
But I concede since Kisame's hype is indeed greater.