Sasuke is being manipulated, that isn't even a question. It doesn't take a fancy jutsu to accomplish this. Sasuke's character has always been manipulated since he got the curse mark, and the sound's Four helped convince him to leave Konoha.
Add in a hallucinatory sharingan and that makes his character infinitly more redeemable, at least from Naruto's perspective, ne?
Catsi brings up a good point, Madara is using Sasuke to take all of the focus away from him, same way Pein was made to look like the leader of Akatsuki. Sasuke is suddenly the target and focus of every Kage, and he's practically been delivered on a silver platter to a convention of supernins.
I agree. Sasuke has been lead by the nose this whole series its nothing new. My concern about actual "mind control" is that it means if he does anything questionable or something particularly atricous, he's absolved of personal responsibility. One of my biggest disappointments with Kishimoto's handling of Sasuke is that I feel he's done an absolutely horrendous job of holding Sasuke accountable for his bad decisions.
I worry because I think it'll be rather cheap to have Sasuke order no kills ,then do something bad, only to find its mind control and it's not his fault. Kishimoto gets the bad act without having to tarnish Sasuke's redemption.