In the massacre, there were two facts had a huge role:
-noone expected
-Tobi.
If Itachi would have stepped up against the coup, the civil war would have started right away. Besides, he couldn't rely on Tobi's help in that case since he was fighting alongside the other villagers.
About killing Danzo, that would have made him the villain.
There really were no other ways. If Uchihas weren't such snot-nosed brats, they could have got to an agreement with Hiruzen. It was their mistake, not Itachi's.
PS: I would have liked to have Uchihas in Shinobi Life Online just so I can be senju and kick ass
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