I think it was a very clever bit of misdirection, not due to the efforts of anyone involved but merely due to the way stories change over time.
So, lets for a moment assume the story is true and accurate on all levels, nevermind personal bias on the part of the story teller, because I have not read a version of the story relayed by one of the shooters or any of the other eye witnesses.
This is my fictional, totally made up account of what I think might have realy happened, taking into consideration that O'Sensei was a sword and martial arts master.
O'Sensei is standing against a wall, approximately 25 meters from a line of 6 military sharp-shooters, armed with revolvers.
1: A revolver works with a rotating barrel, when the trigger is pulled, the barrel rotates to place a bullet under the hammer, while the hammer pulls back to a certain level before slamming back into the bullet. This is quite a long process (relatively speaking) and is quite audible in a quiet room (as I guess the shooting range was at that time)
2: For six men to fire simultaneously, they either had to have a squad leader announcing "Ready, Aim, Fire" or one of the six needed to do it.
Taking into consideration O'Sensei's extensive sword training and his level of awareness, both of these would have been on his mind at the time. He could start moving at the exact moment the squad leader starts pronouncing the first letter in Fire! or he could move during the word Fire!
There would be a brief pause between the word fire and the actual gunshots due to the mechanics of the revolvers.
Taking into consideration that all of these 6 men were unwilling to kill O'Sensei, I believe they would not have made an effort to "lead" him even if they had seen him move as the Fire! announcement came.
So the only thing O'Sensei needed to do was get out of their line of fire, assuming that they were aiming at either his head or his torso, a crouch into the form of a "ninja" as described in the story would have been enough.
Crossing the distance of 25 meters in 2 or 3 seconds is entirely possible, considering that even non-athletes can easily run 50 meters in 6 or less seconds and in the confusion and noise of the gunshots that would have been easy. Also, take into consideration, when you hear a sudden loud noise you automatically close your eyes. This might explain why the story teller could not see O'Sensei move.
I believe that it was a highly controlled, highly prepared test of reflexes and awareness for O'Sensei which has been given an almost mystical element over time.
This is the version I am choosing to believe.
Would any of us be able to do it? Yes, with enough of the right kind of training we would.
Would it be useful in a street altercation with an armed thug? Definately NOT.