I don't doubt that the Don underestimated the initial benefit of getting openly involved in the drug business. I also think it was unrealistic for the Don to think that he could run an international criminal enterprise and not have to get involved with drugs at some point. That was Vito's mistake.

And I agree that Tom was on point as to all the reasons to get into narcotics.

But I think that the Don believed that open or even hidden involvement in narcotics would complicate or delay his own plans for legalizing much of the Corleone Family business. That was his selfish interest. Like I said above I believe the character also had slightly altruistic interests, "I think this drug business will destroy us in years to come".

One of the themes that runs throughout the Godfather novel and Trilogy as well as Puzo's other crime novels is the desire for the Italian-American crime family to enter the larger society and be fully Americanized (except with greater power than the average schmuck).

As Michael told Kay, the Don did not see himself as a criminal.
So circa 1946 (per novel) Vito's already laying the groundwork to move the Family more closely into society, making more money from legal or at least non-violent businesses when along comes Sollozzo and upsets the apple-cart.

A Michael whose older brothers are Damon Runyonesqe "gamblers" or "union bosses" can still become "Governor Corleone" or "Senator Corleone". But perhaps it's not as easy if the news headlines are
screaming about "Santino Corleone: East Coast drug boss".