Because it is way more sweet for hanzo to die by Yahiko`s hands.
Sweet though it was, it's still Pain pulling the trigger. There is something more to that story. Pain openly said that Jiraiya may have been able to defeat him had he known his secret, and Jiraiya managed to take out three of the paths unassisted (well, merged with Ma & Pa but still one Sage). Meanwhile, Hanzo takes on and defeats Tsunade, Orochimaru and Jiraiya combined. A feat so incredible, that Jiraiya could not bring himself to believe that Hanzo had been defeated by anyone.
Now, we've all seen match-ups before where someone overcomes a much stronger foe despite seeming to be inadequate to the task, but when someone who is powerful in his own right (Jiraiya) says that it's impossible to beat a particular opponent (Hanzo), then gives the person that did so (Pain) a run for his money that raises questions.
