It's part of a long, effective buildup of Fredo's weak, ineffectual character that lends power to his near-hysterical outburst in the boathouse ("That ain't the way I wanted it...I'm smart, not dumb..."). In a way, it helps add a bit of complexity: Fredo seems stupid enough to fall for a Roth/Ola scheme that almost ends with Michael's and Kay's death in their bedroom. But it also shows that the constant humiliations he suffered would have built tremendous resentment that might have made his sellout deliberate.