Roth was happy that Michael said "Frank Pentangeli is a dead man" because it seemed to indicate that Michael blamed Frankie, not Roth, for the Tahoe attack. In fact, Roth saw a silver lining in the cloud of the botched assassination: Michael would kill the obstreperous Frankie without his having to lift a finger or spend a dime! But, instead of killing Frankie, Michael dispatched him to settle his problems with the Rosato Brothers. Oh-oh!!! Roth knew Michael would never give a pass to a mortal enemy. Now he knew that Michael didn't suspect Frankie in the Tahoe attack, leading to the possibility that he did suspect Roth.
What to do?

Roth ordered the Rosatos to kill Frankie at their meeting. That way, he'd eliminate Michael's ally before the two of them could cook up any mischief against him. To maintain his façade, Roth could always claim that he’s only done what Michael said he was going to do anyway.