Just because Fredo botched the defense of his father, it would have taken quite a bit of marksmanship and luck to kill or wouund two assassins who were already running at Vito with guns drawn. Assuming Fredo pulled it off, or even if the Don wound up slightly wounded, there's no doubt he would have gained respect, but I think the Don already knew that Fredo was not the sharpest knife in the drawer. At the end of his life when he tells Michael that he knew Santino would have to go through "this" and that Fredo was "well......" Vito kept Fredo close to him as a factotem and body guard, sort of, because he was his son and he wanted to make him feel important even though he had absolutely no say in how the family business was run. Even when he was in the room for important meetings (i.e. with Sol) he kept his mouth shut.

Hey come to think of it keeping quiet was smarter than what Sonny did at that meeting. Maybe he was smaht.