I would assume the Don had given "the talk" to Sonny but what good is it when he doesn't seem to take the advice?

As for the topic on hand, I agree with everyone so far but I would frame it this way: If they had made the deal, Sonny without much leverage would have had to surrender much of the Family's assets, turf, and power. Aside from the immediate consequences, he possibly would have lost confidence not just from his underlings, but from family allies as well. Who wants to sink with the Titanic?

But here's a thought: What if Sollozzo purposely set this "deal" into being intentionally too costly that Sonny would have no choice but to reject it, so to force a war upon a family that had little hope of winning if the other families do gang up to avoid a long war, but also to grab a piece when they can.

I mean why bargain for crumbs when you can have the whole cookie jar?