I think Kenshi explained this fairly well last night, although I can't remember most of it. Hit used two levels of power in the tournament: his suppressed power to fight Goku and Vegeta, and his full power to fight God Mode.
Hit wasn't necessarily stronger than Goku or Vegeta. His Time Skip/Leap helped him take down an unaware Vegeta, who he was near enough power-wise. Goku figured out the Time Skip, but he wasn't strong enough to overwhelm it, and his stamina began to wane before Hit's did. It's not like they could inflict noticeable damage on each other anyway.
Hit = SSG Goku >>> SSB Vegeta (<10%) >/> SSj Goku >= Hit (suppressed)