From the way this battle has gone so far it could still be genjutsu most likely they are still testing each other out. I don't know if a battle could be fought entirely using genjutsu I suppose with these two it could and that seems to be Itachi's favorite method of fighting. Them using genjutsu doesn't make the battle stupid I find it to be really impressive and I think it would be logical for Itachi to try and defeat Sasuke using genjutsu. Either way genjutsu or not Sasuke is still screwed, I really don't see how he would be able to defeat Itachi.