Mafia members, according to the rules, aren't allowed to hit other members. For that alone Gambino could have made a justification for taking him out, but according to Capeci's information (which makes the most sense to me) Gambino may not have been on the killing. From memory I think he mentioned Joe Biondo, Steve Armone and some lower level guys and associates. As for the truth of it, I'd say it's possible. I've heard stories of other bosses humiliating their inferiors, although not necessarily hitting them.