Well done for the theory POW. +1 Internetz for you.
It would be funny to have Itachi Vs. Nagato for all time, it could be a place of the Narutoverse where every steers clear as there is a never ending battle that rages on through many generations.
I too think they will seal each other at the same time, or that Itachi will pull out his sealing sword and seal's nagato. Then Itachi can use the sword on the Edo Kages, saving Gaara and Oonki and in a way redeeming the Uchiha clan.