he is a very skilled jonin but not just yet at kage level
This is what we are talking about when we mean underrated.
The fact that Tsunade and Jiraiya recommend him as an OBVIOUS choice for Hokage over people like Gai means nothing to some.
If you didn't notice either, his chakra is actually steadily improving.
Him, Gai, and Sai are some of the few who survived the battle with the seven swordsmen which included Chidori and Sharingan use along with who knows what else.
Now he is holding his own against a few tailed beasts, I feel as though there are many inconsistencies with Kakashi's strength but he is definitely Kage level. The fact that Deidara said he uses the Sharingan at around Itachi's level (albeit less techniques) stands for itself.
At the very least, Kakashi could take on Deidara. Deidara was also fairly confident that he could take on Oonoki (having possibly wanted to settle the score with his old teacher for some while), and Deidara himself said that Kakashi was strong. That doesn't put Kakashi above Oonoki of course because I don't think that Kakashi is, but Kakashi more or less was stronger than Sasuke at the time as he had the same abilities (for the most part) along with Kamui.