Didn't uchiha madara want to use his sharingan to control kyuubi? maybe konoha wanted him dead so they told itatchi to kill off the uchiha's and make sasuke hate him so that he could get sasuke's mangekyou and kill Madara... but since Sasuke beat him itatchi let sasuke do it and told him... they would only let itatchi do this because he's the only ninja to pull it off without showing like no emotion and hes strong enough so that no one could catch him until he completed the mission? If sasuke met madara he wouldn't have hated itatchi and then itatchi wouldn't have gotten sasuke's mangekyou sharingan (which he didn't get) >_>?
Kill everyone just to make Sasuke hate Itachi to gain power? Isn't too logical. If you remember, Itachi always was much more gifted than Sasuke ever was.. (Ok in the end they're quite equal and probably Sasuke really was stronger, but imagine how strong could Itachi get if he would got made revengeous)
I think... Knoha ordered Itachi, as the most skilled one, to kill all Uchihas, so no one else could somehow get know about the Sharingan secret and obtain the Eternal Sharingan - Only Madara getting it caused enough problems for Konoha. No one wants ~70 or 700 Nine Tails..
And Sasuke's life was spared so that Itachi could give his power to him, (or steal his life to get power) and kill Madara. Then probably someone will have to Kill Sasuke (Or Itachi if he was the one who survived) if he's not trustful and "good" enough...
Gomen, if that's too confusing .-. Just my thoughts after reading this manga.. actually - one of my first thoughts about the storyline
