It was Michael who wanted Tom out because he wasn't a wartime consigliere. Vito never moved Tom out. He had turned the family business over to Michael when Tom was pushed aside as consigliere. Vito even consoled Tom, telling him, "I never thought you were a bad consigliere, I thought Santino was a bad Don, rest in peace."
Exactly. Vito had turned the family over to Michael, lock, stock and barrel. The novel even has Michael saying (in the context of the overall plan to massacre the other Dons, "If you interfere now, I will go my own way" (paraphrasing).
I think towards the end of Part II, Tom was also pretty expandable for Mike. They really could have made something of this in Part III. It's a shame that Duvall was absent, I can't say this enough.
Nor I.