It might be partly due to the fact that Kabuto is controlling so many people. Also, Hanzo never necessarily was evil to begin with. He could have beat Oro, Tsunade, and Jiraiya, but let them go for being able to withstand him so long (In the scene, he didn't necessarily look as tired as the three sannin were). He was probably a good leader that wanted peace, like most leaders. However, Nagato and his crew just started getting too strong--it was at the point that he started acting out of fear, like Danzo, and joined the dark side to keep his power.

In my opinion, the first half of this chapter should definitely have been shown before the actual fighting began between Hanzo and Mifune. It would have given the fight at least some sort of meaning. The fight probably would have been interesting given the irony.