Don't forget that Michael had a far different approach to business than Vito. Vito would have been far cooler about his intentions of buying Moe Green out of the casino.

Fredo's major life experiences when it came to business dealings were from watching his father. When Mike came in to Vegas like some New York cowboy, Fredo was concerned that Mike was coming on too strong and would rock the boat too much.

Also, embarrassingly enough, it appears that nobody thought to inform Fredo prior to the meeting that Mike was now acting Don. Another revelation that Fredo was regarded with no repect by his own family.