Vito's death, and its impact on his judges and politicians, would have benefitted Barzini/Sollozzo greatly.
Regarding Vito's connections, his death would have one of two effects, either of which would have helped the Barzini Family and hurt the Corleone Family:
1. Vito's contacts are up for grabs to the highest bidder. (Incidentally, Tom says Vito's death would cost the family "our political contacts and half our strength," not half of their political contacts.) Sollozzo and Barzini would surely be in position to scoop up at least some of them.
2. Vito's contacts are out of the game entirely, either because they don't trust any of the other Dons to be discreet or because Vito's right and they won't protect drug dealers. Again, this benefits Barzini and Sollozzo, because they'd at least have an even chance to operate without being caught. However, if Vito had lived, he surely would have used his connections to destroy the drug operation once he percieved the slightest threat.
Come on. The highest bidder? If that were the case, what makes you think that Barzini or any other Don wasn't able to match or exceed any offer for their cooperation? The very quote you cite proves that the loss of political contacts was based on vito's personal relationship with them. Your second point reinforces that.
