If the Mangekyou Sharingan was that strong Itachi would have been invincible. What Gai did during his encounter with Itachi was important, as it needed direct eye contact for the Mangekyou Sharingan to connect. As for the Jiraiya vs Itachi argument I belive Itachi is stronger, because Jiraiya is at max around the same level as Orochimaru, who have admitted himself that he is not strong enough to take on Itachi.