Itachi chuckled. "Perhaps. We had good reason for our choices, but I acknowledge your point. I am still not convinced that it would be useful to let you walk out of this room alive."
Notes: Itachi has a sense of humor, or is willing to engage with us in a social manner that involved polite laughter at an obvious joke. He sees our argument, and also sees that it wasn't an argument to let us live, but more a justification of why we
thought Akatsuki were the bad guys. I suspect from this that we don't need to apologize - either he doesn't care that we aided the 5 Kages, or he doesn't know that our personal contributions were substantial.
Itachi laughed, but nodded in respect. "I would expect no less. Understand that if you actually interfere with us then we'll kill you all, but I respect your choice." The assertion that he and his friends could kill an entire ninja clan was said in much the same tone one would say 'If I get hungry then I will have a snack'. Hazō felt no desire to dispute the case. "Granted, we aren't that interested in working with you, which is why we ignored your letter. Still, points for inventiveness on reaching out."
Surprisingly, in the event of cooperation, he doesn't expect to be the dominant partner giving orders, but is open to dispute (but only so much as it doesn't hinder his pursuit of his goals). More implicitly, this suggests that he has some plans brewing that could be interfered with. Maybe nothing in place, but enough that the hypothetical is worth considering.
At this point, he's saying that we're not worth working with. This is maybe a positive end result nonetheless, because even if we aren't powerful enough to justify alliance, by speaking with him we can influence the direction that Akatsuki takes.
"And thus you see why we did not visit or write. People are stupid, ignorant, and selfish."
This basically confirms what we expected the Akatsuki mainline ideology to be - let us save you or we'll kill you. Also Itachi is a bit of a misanthrope, but ninja.
Itachi shook his head in disgust. "No, we couldn't. Never mind, this conversation is clearly a waste. I thought—"
"Excuse me," Hazō cut in forcefully. "I said that you could do it, not that it would work."
Itachi's eyebrow rose and his lips tightened in annoyance at being interrupted and corrected. Far away, perhaps over the horizon and perhaps in some other world, Hazō caught a momentary hint of giant red wheels grinding closer, slowly crushing everything in their path into madness and pain. He swallowed but refused to drop his gaze. Eventually, Itachi leaned back and offered a 'go on' gesture.
Surprisingly, Itachi is fine with being interrupted by the kid (when he interrupted first). He starts to lose respect for us when we pose a bad idea, but is approximately fine with letting us continue speaking - presumably that we have a good justification for why our trash idea isn't actually trash. Also, good work Hazou for having the spine to stare the S-rank genjutsu specialist in his fancy bloodline eyes.
"You could force the world to bow to you, and you could keep them from killing each other where you could see it. It wouldn't actually solve the problem. Violence and crime would simply go deeper underground. You'd find and punish some of it—perhaps even most of it, but you couldn't stop it."
"More importantly, none of us knows anything about ruling," Itachi said. "The Third was not a success because he was a powerful ninja, although that certainly didn't hurt. He was a success because he was a politician, a diplomat, an educator, and a builder. He could get people to work together and he understood how to set up self-sustaining systems. You think we could do that? A kin-slayer"—he gestured to himself, then waved towards the doorway through which Hidan had vanished in quest of tea—"a murderous zealot—"
"I heard that!"
Itachi winced.
Here's the biggest blunder of the conversation in my opinion. Instead of talking about the various ways in which Omnikage-ideas would go wrong, we should have talked about why it would be a mistake. Note that Itachi is eager to point out a flaw in our reasoning - an obvious argument that's stronger than the one that we made. Also note that Itachi is very focused on the Big Men - Hiruzen being the major factor in the peace. It might be tough to sell him on bottom-up strategies.
Fortunately, there's room to build on here. Point out that the need for ridiculously competent diplomats is also a feature of the system, and other nations being willing to go to war on a hairpin trigger. Our pitch is basically that human nature can be changed through smaller interventions, and that if you give people the room to be good instead of evil, then they might choose it. If you set up systems where it's hard to be evil, more the better.
Hopefully this is helpful for planmakers trying to model the Itachi conversation.
EDIT: Perhaps most notably, Itachi didn't seem convinced that we should be
alive at the end of the conversation. We might still need to justify our existence.