I'm not saying Itachi did the right thing by obeying the leadership just because of who they are; that would be as bad as Itachi siding with the Uchiha just because of who they are. I'm assuming that the leadership did what it could to look at the Uchiha's problems and look to address them, not just massacre them based on suspicion alone. There may have been perceived slights ever since the foundation of Konoha between the Senju and the Uchiha but things seems to have been brought to a head by the attack of the Kyuubi which was controlled by an Uchiha. The Uchiha were isolated as a precaution it seems and they didn't like it. Was it the right thing to do? It can be seen akin to collectivised punishment or racial profiling which probably wound the Uchiha up.
I think the key to this lies in whether or not the Senju really did oppress the Uchiha from the start as claimed by Tobi and whether the Uchiha really were trouble makers from the start. If they did oppress them then perhaps the Uchiha were right to fight back in which case, Itachi shouldn't have just sided with the leadership. However if the Uchiha were to do a coup it should have been a targetted attack and not a random massacre of other ninjas from the Senju clan. If they were planning random massacres then Itachi may have sided with the leadership in order to implement a solution with the least amount of bloodshed, if he thought the leadership itself could still be salvaged and be made just whilst the Uchiha were beyond redemption and had become twisted.
You could say I guess the mistake in this was the way the leadership dealt with the post Kyuubi attack situation. It shouldn't have criminalised an entire clan even if one member was responsible for the attack.