I believe Turnball and Boss of bosses made strong points in why Fredo wasn't initially killed. I know this is just conjecture, but, if the Five families would have accomplished their objectives in killing Michael at Tessio's sitdown. It stands to reason that Barzini would kill off anyone who will inheit the Corleone family(i.e., Clemenza, Tom and Fredo). This will stop the family from 'rising up from the ashes'. Yes, Fredo as a Don would be a joke. But Fredo can be easily manipulated. Under Don Fredo, his puppet leadership could have been controlled by an outside family. Such as the west coast families.