By that same token the Third Hokage is the strongest Kage and Gaara never had a Jinchuriki but a different demon altogether.
Retcons happen, you can't just ignore them or isolate lore to half the plot. I'd like to forget most things post Pain happened but it did and is canon.
Retcons can't be used here, because they don't fit the argument.
Hmmmm...let me try to explain this.
Retcons can't be accounted for in this case, because the situation we're talking about, Sharingan vs Byakugan and why the Sharingan didn't get a similar treatment, was based on the information known only at that time.
That means that the decision to give the Byakugan a curse mark was made at a point where the Sharingan hadn't been retconned with buffs.
You can only really argue using the situation that was present at the time the decision was made.
As far as part 1 was concerned the 3rd Hokage was the strongest Kage, because at that point there existed no information of someone superior to him. We didn't know about any other kage except for Minato, who's strength we weren't aware of.
He was claimed to be the strongest at a time when no one stronger existed. The appearance of stronger Kage proves the statement false, but until that statement was proven false it was as correct as we could imagine.