Vito's concern about drugs was that he would lose his political protection if that was his business, but in fact when they reached the compromise to regulate the sale of it the way they did, Vito did not appear to lose his political influence at all. Had someone thought this through earlier it would have avoided a lot of trouble. Personally I think Vito'r real reason for not going in on the deal was that he was not in control of it. He was just along for hte ride, and was more afraid that Sol would run amok than anything else.