You are right. Kakashi is a great ninja but he just doesn't have the sheer stamina and techniques required to bring him to that other level. Every S-rank ninja we've seen has had something special that separates them from rest whether it be a Kekkai genkai, some forbidden techniques, or just raw power and an exorbitant amount of chakra. Kakashi has none of these, in essence he is just a normal ninja, nothing special, nothing that stands out which is exactly why I like him.

He is as venerable as anyone else and is usually at a disadvantage against any of his opponents but he always finds a way. The sharingan is usually what he uses to get him to that next level when he needs to but because it isn't "his" doujutsu it comes at a high price. He simply doesn't have the chakra he needs to be able to sustain it, in that respect however he is greatly improved.

When he first used it against Zabuza that battle was only for a few minutes and he passed out afterwards, when he was chasing Deidara and fighting Itachi he had it on for a much longer time and was unaffected. In the beginning of the Shippuden during his training with Naruto and Sakura he used it throughout and even used a few techniques high level techniques. During that fight he mentioned that he was now able to use the Sharingan overnight which I'm assuming since he was using it during the day means he could use normal sharingan for about a 24H period.

MS on the other hand is completely different. Itachi used the technique a total of three times after which he could no longer use it and needed some down time to rebuild his chakra. During the Gaara arc Kakashi also used the technique a total of three times and given that the sharingan is not his technique and his lack of chakra I give him alot of credit for being able to use it as many times as Itachi was able to. Now when you take all that into account him being incapacitated for a week because of using it that many times is astounding and shows you how much he has improved.

Going from simply using the Sharingan for a few minutes putting him out to being able to use it overnight and use MS 3 times is impressive. Itachi didn't even think Kakashi was capable of it. Kakashi also seems to be quite satisfied with himself he is not striving to be the strongest or the best ninja or anything like that he is simply doing his part. He is leaving all that up to Naruto.

@Kraco: Like I said before I think Kabuto’s medical skill may actually be better than Tsunade’s. The reason they went to her is because of her knowledge and experience. If you were dying would you go to a doctor who was young and talented or someone who was renowned for having the most knowledge and experience in the field? Tsunade may be better than Kabuto but that is because of her knowledge and experience something that is invaluable not because of any lack of skill on Kabuto’s part. Also like I said before I doubt Tsunade would have been able to do anything to help Oro simply because I don’t see how medical jutsu could have repaired damage that was caused by part of his soul being sealed.