The 22-year-old Japanese shuttler, who has shot to number eight in the world this year, confidently dispatched Hidayat, a gold medallist at the Athens 2004 Olympics and former world number two, but now ranked 12 in the world.
"Taufik is my idol. But because the Thomas Cup is a team competition, it is nation against nation on court, so I could see him as my enemy," Tago said after his 21-12, 21-17 victory and second career win over the fiery Indonesian.
"But after the match, he is my idol again," he said.
The 30-year-old Hidayat, who is contemplating retirement after the London Games, said it was normal for young players to beat him now, but held back on sharing Tago's joy.
"If I lose to an Indonesian youngster I am happy, but I am not happy to lose to a Japanese youngster," he said, while praising Tago for his calm and control.
Hosts China play Malaysia later Wednesday in Wuhan for the right to take on Japan in the semis. "Japan never wins against China so it is hard to say (for the semis). But Japanese players have the fighting spirit," said Noriyasu Hirata, who beat the first Indonesian doubles in two games with his partner Hirokatsu Hashimoto.
China will be fully expected to see off Malaysia, especially after the Malaysians lost world number one Lee Chong Wei to an ankle injury that threatens his Olympic hopes.
In the second Thomas Cup quarter-final of the early session, traditional European powerhouses Denmark went through easily 3-0 against the emerging force that is Russia.
In the women's competition, the Uber Cup, China showed no mercy against a plucky German side, finishing them off 3-0 but not without dropping a number of points and one game.
Meanwhile, World number one Lee Chong Wei will be out for up to a month after tearing an ankle tendon at the Thomas Cup Tuesday, seriously denting the Malaysian star's bid for a first Olympic gold medal. Lee landed awkwardly just moments into the first match of a group tie against Denmark and was taken to hospital for what was confirmed later as a torn ankle tendon as Malaysia lost 3-2 in Wuhan. "He will be out for about three to four weeks," said Tey Seu Bock, Malaysia's singles coach, adding the player would return early Wednesday morning to Malaysia for another MRI scan.
In the evening tie, home favourites China romped to victory against Indonesia 5-0, with Lee's arch-rival Lin Dan looking sharp against Simon Santoso, beating the world number nine 21-10 21-17.
"Our biggest enemy is not each other but injury," said world number two Lin, who took gold ahead of Malaysia's Lee at the Beijing Olympics four years ago.
"We are not so young any more and in the future injuries will happen more and more. We don't have so much time left," said the 28-year-old Lin, the game's most decorated player, about his 29-year-old opponent.