oh yeah, also lets not forget that Because the flames of amaratsu are summoned directly at the target, it is very unlikely that a person will be able to avoid this jutsu. However, the flames can only be summoned at less than 5 m from Itachi. If the target is beyond 5 meters, the flames have to travel through the air to reach him/her. This means that the farther the target/Jiraiya is, the better his chances of avoiding or blocking the flames.
I'd say that Jiraiya can play the defense game the entire battle and with with a strategy of just out lasting itachi. its that simply, itachi is in poor health and his moves, although super badass and powerful, are very tasking on the user. Jiraiya excels at defense, so out lasting his opponent isnt out of the question, and if you take into account that his opponent is itachi, well i'm sure you get the picture