Problem: Hillshade displays as unique values
A Hillshade raster that has 25 or less unique elevation values displays as uniquely rendered, not stretched, when added to ArcMap.
All single-band rasters with 25 or less unique values display by default with a unique value renderer.
Solution or Workaround
The symbology may be changed to 'stretched' under the raster's properties. A layer file may also be created and used to save the stretch symbology.