i might have a different version than you guys. mine says:

itachi: it's impressive that without any uchiha blood relation... you can use the sharingan to that extent... however... your blood isn't like ours... so that eye doesn't suit you...

and he also said:

itachi: however, this is a special eye jutsu; genjutsu "tsukuyomi"...only another sharingan use with the same blood flowing in me could possibly defeat me!

kakashi's body might be suited for it sharingan (to some extent), but certainly not his blood.

baka, plz don't double post.