I always thought Michael went out of his way to be very mean to Zasa and it was uncharacteristic, IMO.
I think Michael should have avoided insulting Zasa and moving on with his life. He was retiring anyway. Why insult someone have to worry about them coming back at you?
It probably started when Vincent accused Zasa of saying "fuck Michael Corleone". It didn't look like Zasa was showing much respect during that meeting either. Especially when he sat in Vito's old chair like he was the king himself.
I always thought Michael installed Zasa purely as a figurehead. Michael considered Zasa small potatoes just as Pentangeli. Through those figureheads he could maintain his influence without getting the blame of being a mobster himself. Why would he otherwise stop Zasa from rising in the Commission.