Opening Argument
First off, I am a fan of both Nagato and Itachi. They're both good characters to me and Itachi is probably the best Uchiha up there with Shisui imo. So this isn't a hateful fanboy rage rant or anything, this is just me addressing the constant and annoying overhype that Itachi gets as a character in almost every situation. I know this is very long but just bear with it and read it if you don't mind. Alright, so this still seems to be a prevalent and highly debatable topic within the Naruto fanbase and I'm just wondering how? Nagato literally has counters to everything that Itachi can use against him. First off, Itachi's most prized genjutsu will not work on Nagato since based on logical conclusions the Rinnegan is unaffected by visual genjutsu. Now let me explain why, throughout the entire series visual genjutsu (even when there was Sharingan users around) has never been used on a Rinnegan, and the one time it is done (Infinite Tsukyomi, the most powerful visual genjutsu in existence) the Rinnegan has the power to counter and defend from it. That, combined with it literally making no sense for a Rinnegan user to be susceptible to a Sharingan user's genjutsu, considering the Sharingan is just a lesser and weaker form of the legendary Rinnegan makes me ponder at how anyone can bring up visual genjutsu against a Rinnegan user. So based simply on that, Itachi's tsukuyomi and other visual genjutsu are ruled out. Immediately handicapping Itachi.
Secondly, Amaterasu. Now, Nagato has the ability to block and absorb any ninjutsu with the preta path. As well as the ability to dispel attacks with the deva path, which we've actually seen. So how on earth is Itachi's amaterasu going to be able to even hit Nagato and do anything to him when he has shown no problem keeping up an almost constant ninjutsu-absorbing field around himself or one of his paths without a problem for very long periods of time while executing other attacks? It makes no sense. But most importantly, Nagato has the ability to sense when Itachi is about to use amaterasu as seen when they engaged Killer B and Naruto. Giving him time to defend himself and counter. So Itachi's amaterasu is also ruled out
Thirdly and probably most importantly; Itachi's susanoo with it's totsuka blade and yata mirror. This seems to be the main thing discussed that really "heats up" the debate. Okay, first things first Itachi is not invincible with these weapons, the power of his susanoo is incredibly overhyped and overrated and it's flat-out annoying. People seem to forget that in all of the instances in which Itachi utilized the powers of his susanoo's treasures (which is very low) the entire situation was in his favor almost from the beginning. When Itachi used it on Orochimaru in his giant eight-headed snake form, Orochimaru was just waking up from a slumber and he was rather sluggish and also a giant slow moving target. Itachi was basically given a free hit when he impaled and sealed Orochimaru away.
Next, when Itachi uses it on Nagato. When Itachi did this, it was done through a smokescreen against Nagato who was mindless, crippled, and blinded by the smokescreen. That was yet another free hit for Itachi and now for the yata mirror. This is by far the biggest piece used in arguments for why Itachi would win. I'd like to say that first off Itachi's yata mirror has only ever been used once in the series, and when it was used, it was used to defend from Kirin which is an elemental attack. The wiki says "The Yata Mirror was an ethereal shield wielded by the left arm of Itachi's Susanoo. It is said to be endowed with all nature transformations and able to change its characteristics to any nature transformation to completely negate any attack, whether it be spiritual, or physical."
Hence how it mentions nature transformation twice in it's brief explanation of it's abilities. Also, there are nature transformations techniques that are physical and/or spiritual and the majority of ninjutsu is elemental. So it saying "any attack" is likely an exaggeration unless you're implying it can negate even taijutsu and senjutsu? Are you saying it can negate kinetic energy too? Something that the most godly characters in the series (Juubito, Juudara, Kaguya, Momo and Kin) can't even do? Face it, the yata mirror is simply an incredibly hyped up and exaggerated piece of equipment that was rarely ever used in the series and it alongside the totsuka blade are suppose to make Itachi's susanoo practically invincible which just isn't true. But, for the sake of the argument let's say that the mirror really is truly invincible. It really doesn't make much of a difference, because it has never been said to have been omnidirectional (Itachi positioned his body inside of it when he used it anyway), Itachi cannot manifest it if he cannot even manifest or keep up his susanoo if for example a sound-based genjutsu is being used on him to break his concentration, and most importantly it takes up a lot of chakra to use especially since Itachi has an MS even if he is in his prime.
In addition, people say that Itachi already beat Nagato in that brief fight. That isn't true, what happened was that Kabuto had a one-track mind while controlling Nagato and he made Nagato purely focus on attacking and wrecking NTCM Naruto and Killer B. He completely ignored Itachi, once again giving Itachi a free chance to jump in and help them out of the situation. Afterwards, Itachi asks for Naruto and B's help in destroying the core of the chibaku tensei and then as we all know he seals up Nagato while he's stationary and blinded. There's also the fight with Kabuto, in which Itachi got hit by two lethal attacks that would have normally killed him had he not been reanimated and was even incapacitated by one of Kabuto's genjutsu and needed Sasuke's help to escape. Yet everyone talks about how Itachi could have easily beaten and killed Kabuto, but I don't want to get into that since this is about Itachi and Nagato.
Hypothetical Fight and Closing Argument
Let's say that Itachi and Nagato both start off about several dozen feet from one another in an open field. Both are in their prime with full health and chakra and no disabilities with their strongest dojutsu already activated. Itachi's genjutsu wont work, his amaterasu will be constantly absorbed or dispelled, and if he tries to use his susanoo Nagato can counter by summoning up like a dozen animals (the stealthily invisible giant chameleon, the multiplying dog with each hit, the centipedes, ect) that all share his vision to bombard Itachi's susanoo from all directions alongside using his asura path to bombard Itachi with mecha weapons whilst using a chibaku tensei and keeping his distance by flying away himself or on his eagle or something. I know this sounds one-sided, but that's because the way I view it, it is. What can Itachi do to counter? There's no way he can block all of those attacks or set all of those animals on fire with amaterasu or impale them all with his blade and seal them all up so quickly when all it does is take Nagato seconds to summon up a horde of gigantic rampaging animals that can traverse the sea, land, and sky. If Itachi somehow managed to get out of that and rushed to get close and use taijutsu how does that even make a difference? Neither Nagato or Itachi have any really impressive taijutsu feats, and Nagato can grow additional arms that fire out missiles, lasers, can rip out Itachi's life-force, soul, or his chakra all at once while using gravity on him to hold him in place, knock him away, or pull him closer. So how the hell does Itachi beat this guy? Even Kabuto said that Nagato was his second strongest reanimation right next to Madara.
Like I said above, I am a fan of both characters and I like them both. But I'm really not understanding how people can have such long and serious debates about Itachi being able to best Nagato? The guy just dies horribly imho. Feel free to disagree.