[Kuruharan]

None of that is the least bit necessary to reconcile the letter to the story. Let’s take a look at each of the characters one at a time.

Elrond

He says…

“Alas , no,” said Elrond. “We cannot use the Ruling Ring. That we now know too well. It belongs to Sauron and was made by him alone, and is altogether evil. Its strength, Boromir, is too great for anyone to wield at will, save only those who have already a great power of their own. But for them it holds an even deadlier peril. The very desire of it corrupts the heart. Consider Saruman. If any of the Wise should with this Ring overthrow the Lord of Mordor, using his own arts, he would then set himself on Sauron’s throne, and yet another Dark Lord would appear. And that is another reason why the Ring should be destroyed: as long as it is in the world it will be a danger even to the Wise. For nothing is evil in the beginning. Even Sauron was not so. I fear to take the Ring to hide it. I will not take the Ring to wield it.”
-The Council of Elrond

First, he does not say it would be a certainty that one of the Wise could overthrow Sauron in this manner. In fact, this passage does not really suggest that it is possible. Elrond is speaking speculatively here. He is explaining to Boromir why it is not even worthwhile to consider this as a viable alternative. Elrond wanted to utterly defeat this evil so it could never come back again or pervert anything else. Whether or not Elrond could have mastered the Ring doesn’t seem to have much to do with the underlying motivation of the character nor is Elrond lying. Whether or not he could have mastered the Ring, Elrond realized that the outcome wouldn’t be good for anybody. I see no problem reconciling letter 246 with the story here.

Galadriel

She says…

Galadriel laughed with a sudden clear laugh. “Wise the Lady Galadriel may be,” she said, “yet here she has met her match in courtesy. Gently are you revenged for my testing of your heart at our first meeting. You begin to see with a keen eye. I do not deny that my heart has greatly desired to ask what you offer. Of many long years I had pondered what I might do, should the Great Ring come into my hands, and behold! it was brought within my grasp. The evil that was devised long ago works in many ways, whether Sauron himself stands or falls. Would not that have been a noble deed to set to the credit of his Ring, if I had taken it by force or fear from my guest?
“And now at last it comes. You will give me the Ring freely! In place of the Dark Lord you will set up a Queen. And I shall not be dark, but beautiful and terrible as the Morning and the Night! Fair as the Sea and the Sun and the Snow upon the Mountain! Dreadful as the Storm and the Lightning! Stronger than the foundations of the earth. All shall love me and despair!”
She lifted up her hand and from the ring that she wore there issued a great light that illuminated her alone and left all else dark. She stood before Frodo seeming now tall beyond measurement, and beautiful beyond enduring, terrible and worshipful. Then she let her hand fall, and the light faded, and suddenly she laughed again, and lo! she was shrunken: a slender elf-woman, clad in simple white, whose gentle voice was soft and sad.
“I pass the test,” she said. “I will diminish, and go into the West, and remain Galadriel.”
-Mirror of Galadriel

This is a character speaking. She is not omniscient. While there can be no doubt that she is honestly expressing her desires and what she thinks might happen, these are just her desires. Anybody can desire all sorts of things that won’t happen no matter how hard they try. Just because Galadriel says these things does not mean that she is speaking with Tolkien’s voice and that they would come about. There are also some other possibilities here.

Speaking directly about Galadriel, Tolkien said (in his own voice)…

In the “Mirror of Galadriel”, I 381, it appears that Galadriel conceived of herself as capable of wielding the Ring and supplanting the Dark Lord. If so, so also were the other guardians of the Three, especially Elrond. But this is another matter. It was part of the essential deceit of the Ring to fill minds with imaginations of supreme power. But this the Great had well considered and had rejected, as is seen in Elrond’s words at the Council. Galadriel’s rejection of the temptation was founded upon previous thought and resolve.
-Letter 246

This is quite complimentary. Tolkien implies that Galadriel knows that she is being lied to. She could be relating the visions the Ring was planting in her brain. She could even have been engaging in some mockery of both Sauron and the Ring in this passage. However, I think she may have struggled a little more with this decision than, for example, Elrond and Gandalf.

In other respects she is very similar to Elrond in her desire to see this evil destroyed forever. Just because it would have been impossible for her to successfully challenge Sauron by using the Ring doesn’t diminish the fact that she refused temptation. I see no difficulties reconciling the character of Galadriel between the letter and the books.

Aragorn

I have to admit that I don’t see that there is a whole lot more to say about him in this context. He didn’t lay any claim to the Ring at all and when Frodo attempted to give it to him at the Council of Elrond he specifically denied it. He won a contest of wills against Sauron over his own property, but Aragorn’s claim of ownership gave him an advantage. Sauron’s fears of Aragorn likely stem from the fact that Aragorn’s ancestors defeated him even when he had the Ring. I think it unsurprising that this alone would cause Sauron concern.

Saruman

Admittedly, this horse has been pretty well beaten to death already, so just a few high points…

Saruman’s will was ultimately proven to have been weaker than Gandalf’s, Aragorn’s, and Denethor’s. Denethor is particularly telling as nobody that I’ve ever seen has put him in the Hall of Potential Successful Challengers to Sauron.

Sauron was able to play Saruman like a well-tuned zither. There is no particular reason to believe that Saruman could have been able to enslave/compel/fool the Ring (which was part of Sauron) into serving him and not betray him to Sauron at the first convenient opportunity.

The fact that Saruman was deluded by his greed into falling and chasing after something that would never be in his power to have only makes the character more tragic and the story more interesting, in my opinion.

The primary issue here appears to be that people just don’t want to give up some of their ideas about him.

Gandalf

are happy to accept Gandalf as a moral coward who would send Frodo & Sam to their deaths (by lying to them & telling them he himself could not master the Ring & would wnd up enslaved to it), in order to destroy something that he himself could have 'mastered'

What exactly is it you are advocating here? You seem to be arguing that, in order to save Frodo a lot of trouble, he should have just mastered the Ring and been done with it. I’m not sure this would have been a happy outcome for anybody. The very fact that he, who everyone agrees could have taken the Ring and successfully challenged Sauron, did not claim the Ring only shows his virtue in its most positive light. He wanted to overthrow tyranny, all tyranny, including the potential for his own. Why he should be accused of moral cowardice on these grounds is beyond me.

All the characters in the story were trying to trying to preserve their freedom and overthrow a terrible tyranny. Whether they did or did not believe that they themselves could have mastered the Ring and set themselves up in Sauron’s place doesn’t, in my view, reflect one way or the other upon their underlying motivations. What they did try was to use Sauron’s fears about somebody else using the Ring against him. (It is interesting to note that in several cases the mere thought of the Ring just being in the possession of another was enough to drive individuals into varying states of frenzy. There is every reason to think that Sauron himself would be consumed with a terrible Ring-lust just for its own sake. It was literally a part of him gone missing). In Gandalf’s case, his fears were completely justified. It may also be true that he feared Gandalf far more than Aragorn. That may even be likely. It would certainly be in keeping with Gandalf’s personality if at the Last Debate he was simply displaying modesty in downplaying the fears he awoke in Sauron and making Aragorn look greater. Gandalf was also thinking about the future of Gondor, which Aragorn embodied. Have to impress the future underlings and all that.