Why was there no plot development for a confrontation between Neri, Michael and Tom in part III!?

That alone would have been enough for a film. At the end of 2, Neri clearly has Michael's ear and is pushing to be his #1 ace. Seems he succeeds, to be honest.

If anything, part III could have been great with Vincent, Tom and Neri trying to gain control again of the family again.

Because Tom was dead by then??

Duvall didn't want to play Tom again.

Whatever the reason, they killed off the character. I'm not sure they could have cast another actor in the role successfully.

Duvall was financially low balled to reprise the part. When he asked for more the studio said "Robert Duvall doesn't get that picture," and they went out and cast George Hamilton. Sometimes I think it was intentionally done badly so no one would ask FFC for a Part IV.

Or maybe the point of the topic is whether Duvall would have been won over by an enhanced role for his character.

("They threatened to replace me with George Hamilton! Hah, Now I know they're ready to cave in! Demand another million!")