By every metric itachi Uchiha was a clan hero. In an attempted massacre of the clan, he had jumped in, ultimately died, but held them enough to where the massacre was able to be stopped.
Even after his death, he was useful to the clan being one of the main bargaining chip to bargain for better terms of the Uchiha. They had just lost their heir the village couldn't exactly walk away from this unscathed.
So why did every Uchiha think it was appropriate to literally spit on his grave?
No one ever did obviously that it would be considered be considered too rude and inappropriate but they all thought that. His grave barren outside of konoha the clan refusing to let him have a traditional funeral or to buried where the rest of the clan was to be buried in the future.
Because what good was a clan traitor on a holy land?
The only reason that attack took place was because konoha wanted to contour the coup de tat that was about to happen by the uchihas that was informed to them by itachi. They wanted to leave no loose threads behind that would've been left by the original plan.
The only plan of the massacre agreed upon by the konoha elders and itachi was also revealed to the clan it was to eliminate the whole clan by himself and only let sasuke live.
Coincidentally, during the attempted massacre the only people in the house of the clan head family were itachi and sasuke. An attack had been charged with both of them as the target set. With the threat to both of their lives itachi started fighting being extra forceful to any attacks towards Sasuke. That's how he held the attack up.
The reason they started with the clan head's house is to catch them all off guard. If they had no leader the uchihas would be running around like headless chickens during the attack. But that's where there attack started and stopped eventually.
As itachi fell to his death and eventually moved to Sasuke, just as they were about to attack the child. They recieved the message that the Uchiha had done a coup and hokage was now under capture. The unit was forced to retrieve as they couldn't risk the life of a hokage for a child.
Few days later came the stages of the negotiations, they couldn't negotiate fugaku to be hokage. The village had argued that they had just led a coup and the changes of the villager's actually believing in them was slim to none.
It was not worth for them to score more resentment towards themselves or to put a target on their back for such little influence. The reason the elders and hiruzen were speaking more in their favour was because technically it was wrong from their side to attack like that they also couldn't ignore the death that occured of itachi Uchiha.
A promising shinobi and konoha loyalist to the heart. Dead because of their mistake. Even worse was their original plan to just kill them all along with itachi with no regard of any of their personal lives goals or ambitions all to fulfill their agendas.
They had been able to get a Uchiha elder, a higher budget and some other stuff. But the most important privilege was their secret to remain a secret. The village would never know that the uchihas had plan a coup. It would simply be the shown that the new privileges had been as an apology to the Uchiha clan for such a disgusting action.
The elders had tried to argue that it was because the uchihas had planned an attack but without proof their claims had no leverage and they already looked pretty bad in the situation anyways. Extra paranoid people who definitely don't seem fit enough to take decision for the village.
The Uchiha clan not only had proof of heir misconduct but also a dead body six feet underneath. The odds were in their favour. In ways it felt good to be the one on the top. Not being the accused but one accusing and demanding stuff. It was unlike the usual disrespect the village had towards their mere existence
It had also changed the image of the uchihas from the heartless power abusing freaks to more victim like underdogs that are unfairly targeted. For the first time since the founding of the village their was genuine acceptance in the eyes of the villagers for the clan.
The clan had been able to branch out and become more connected than ever. Some of the villagers even questioned why they had never connected like that. How amazing their traditions truly were only to be met with the answer that they felt alienated from the village.
Some villagers even apologized to them for making them feel that way on behalf of the village. The uchihas were thriving.
During these conversations at some point it would shift towards itachi and his death. They were respecful enough in public of course all the inside information was always kept inside that's why acting normal was so important here.
In the house of the clan head, after the attack on the uchihas, Sasuke started having nightmares a lot of them. He would wake up screaming only to also wake up his mom who was also sleeping next him who would pull him towards her and then calm him down from his nightmares. He was trained to be the next heir after his brother only to scream at his father that he never wants anything to be with being clan head or even shinobi.
Fugaku in some ways had also all his sparks, he was never the one to be overly enthusiastic but he was always charismatic but he had lost something that did with his son and his humiliation. He was still the leader of the Uchihas and a good one. But in ways just a hollow husk of himself. He never mentioned this mostly because nobody would listen but he was proud of itachi and mostly of his love for his brother.
Mikoto and fugaku stayed together after this but their love didn't. She hadn't loved him at their marriage and it was an aarraged one but she has grown to appreciate the man and love him eventually. She never looked at him in his eyes. Too disgusted by the use of his son's death as a negotiations and fugaku's involvement with attendance in those meetings.