Danzou was indeed competing for the position of third Hokage against Sarutobi, DB did a very bad job with the translation as usual. I don't think root has been disbanded or that Danzou has fallen into disgrace because if that had happened they wouldn't regard him so highly and be looking to him to make such important decisions regarding Naruto and Konoha. I think the reasons he didn't become hokage after Sarutobi died is for one, if he was competing for the position of the third and Sarutobi was in his 70's i believe when he died that would mean that Danzou would be in his 70's aswell, so he is just too old. The other reason would be that he has obviously sustained a lot of injuries in that past as you can clearly see from his appearance so I doubt he would be able to do much in terms of combat.
Since you all seem to be defending Shizune I guess I should talk about her too. I don't think "tool" was the best word to use to describe her as it has a very loose interpretation.I think she is a very capable ninja as I have said before I just want her to do something so I can have a reason to like her, because for the most part she is just a pencil pusher, although she does lead a supposedly very strong squad and she did perform some serious medical jutsus at the end of the Sasuke retrieval arc.
@ fifafreak18: I think you're to only one who was staring at sai's exposed skin enough to notice.
@Kraco: I hope you are not talking about the two ninjas I think you're talking about because they are way too bad ass to even be considered tools.