I've always wondered this as well. Sharringan abilities include:
Fire that burns through anything and lasts for like 5 days... including trees
The ability to transport people/items to alternate dimensions
The ability to torture people in alternate dimension where you control time and space
You can phase parts of your body to evade attack
You can see through any jutsu
You can copy almost any jutsu
You have super enhanced awareness and ability to read your opponents moves
You can cast crazy insane illusions like bursting your body into crows, growing multiple heads from a person or tricking them into using their own jutsu against themselves
A near impenetrable spirit shield
You have to be the worst ninja ever if you have all of that but you lose to a guy whose claim to fame is growing trees really fast. I think the flashbacks were all BS. Madara was just sitting on his butt all day eating hot dog ramen and never practicing or training.
I think the first Hokage was the creator of the enhancing of punches by chakra than Tsunades uses, so I theorize he could punch your ass to the Moon, he was much more powerful than Yamato using Mokuton and possibily his base ninja skillset was the s$%&...
@kira112: What does Yamato have to do with anything? It's already been proven that he's nowhere near Hashirama in terms of strength and overall abilities. I believe he admitted so himself. If he was he would have been a prime canditate to become the next hokage
Don't let Zombie first and 2nd hokages fool you, they are likely much more threatening when they where alive then when they where pawns by Orochimaru. Atleast the fourth made it sound last chapter that the 2nd apparently can teleport around too. :P