Maybe we are buying into Vito as a great guy a bit too much here.
First of all I don't think the whole drug thing was presented to Vito the right way. Because of his "Sicilian Cunning," he smelled a rat from the beginning. He tells Sollozzo he doesn't care what a man does for a living, and tells him as long as his interests don't conflict with the Corleones, he wishes him good luck in his drug dealing. Minutes later, he confides in Luca that he wants to see what Sollozzo has got underneath his fingernails. He tells him to to to the Tattaglias, etc. Maybe he already suspects that the Tattaglias are fronting for another family....bottom line is he does not trust what is going on, and he knows there is more to all this than meets the eye. What Vito doesn't quite see at this point is Barzini's ambition to become Capo di tutti Capi, and the backhanded way he is going about it.

In reality Barzini played this all wrong. He should have sent Tattaglia to meet with Corleone one on one, and not put Sollozzo out there to begin with. Had he done that it is entirely possible they would have eventually negotiated a deal much like the one Vito was forced into when he had to bring Michael home.
Perhaps a meeting of the commission at that time, during which the bosses from all over could tell their tales about how they don't like drugs but the money involved corrupts the people who work for them, and how they "can't resist." despite being paid extra not to deal. Vito as a practical businessman would then have seen that this drug business was unavoiable, and he may have gone along with restricting the drug trade and controlling it, with the understanding that and violations of the code would have negated his obligation to provide political and judicial protection. Such a compromise IMHO would have tempted the likes of Sollozzo to overplay his hand, and end up being rubbed out by consensus. On the other hand, Tattaglia could have made a fortune selling pot and coke to all the johns and the rest of them could sell heroin in the "dark areas," keeping it away from the old neighborhoods. During this period, Vito could have started moving on Vegas, as Michael ebventually did, and "legitimize" things through Tom, and hpefully Michael.

So aside from not having enough time, the Don "was slippin."