The reason Naruto lost is because he was fighting his friend. remember that his weakness is his "heart", not his physical heart. If Naruto took that battle seriously, and aimed to kill sasuke, it would have been over. However, he was holding himself back the entire time.

Also, For you people saying that naruto lost because he sucks as a ninja:

A) he learned , almost entirely by himself, how to use Rasengan, a high level attack of a hokage. he also learned Shadow replication, also a high level attack, in a short period of time. now that hokage was refered to as the genius. Naruto acts like an idiot, but obviously he isn't one.

b) though he's not a tactical genius like shikamaru, naruto has show, on many ocaisions, quick thinking. like when he made the whirlpool in the water.