While I agree that all the theories above have merit, I think a major factor not yet mentioned was Michael's personality.

It was not in Michael's controlling nature to work in consultation with someone else.

He doesn't actually replace Tom with Vito as consigliere, he basically eliminated the position.

His words are telling: "If I ever need help, who's a getter consigliere than my father?"

"A man in my position cannot afford to be made to look ridiculous!"