It seems that Orochimaru is much weaker than Itachi, in that even combining with Sasuke, they say their odds of killing Itachi are not good.
However, Itachi is scared shitless of Jiraya, even with his shark-friend helping.
But Orochimaru wasn't scared at all when he saw Jiraya come on the battle field when the three Sannin's fought. Maybe Orochimaru realized Jiraya was poisoned.
But still, it seems an odd loop.
My guess is all three Sanins are at similar levels.
Itachi should be stronger than all three. But for some reason he is scared of Jiraya. I wonder why?
Maybe when Orochimaru said he wasn't strong enough, it might not mean Itachi, but the entire Atasaki organization. He's might be baiting Itachi in front of Sasuke to get him to train harder.