Madara was amazed that Nagato who knew who he was had never gotten the joke when it came to his other name, especially considering the fact that it was a joke that an Akatsuki member should easily understand. It was a pretty lame joke, but still...
If one went by the On readings, the Kanji for one through ten were:
Ichi, Ni, San, Shi, Go, Roku, Shichi, Hachi, Kyuu, and Jyuu.
If one went by the Kun readings, they were:
Hitotsu, Futatsu, Mitsu, Yotsu, Itsutsu, Mutsu, Nanatsu, Yatsu, Kokonotsu, and To.
So while it wasn't grammatically correct, for the purposes of his joke, Tobi could be written as "Ten tails".
Author's note: for those who were wondering about where I got the idea for this, it was the scene in Naruto Shippuden Episode 99 where Tobi and Deidara are at the Dango shop and after Tobi asks Deidara what Biju they're after and Deidara responds with "Sanbi", andTobi starts counting on his fingers going "Ichibi, Nibi, boku wa Tobi" ("One tail, Two Tails, I'm Tobi", yeah, it kinda falls flat in English)