1) From roughly 2004 onward (the Tony B. situation, the War with NY) Tony Soprano was proving to be both troublesome to New York (who, remember, viewed him as a vassal) and within his own family. Capos such as Carlo and Larry were open in the fact that Tony wad fucking them over with the Tony B. crisis; others like Burt were being swayed to new leadership during the War with New York.

2) While Butch gave his tacit approval of the hit on Phil, what authority did he have? The meeting was off-the-books; Butchie, Al and Carmine could all claim no meeting ever happened and no approval was ever given.

They could win by having Tony do their dirty work for them, and then scoring further points by "finishing the job" and killing Tony themselves, all while having plausible deniability as to their complicity in Phil's murder. Meanwhile, Butch emerges as Boss, gains the support of Phil's loyalists by avenging Phil's death by killing Tony, and now has a much weaker and smaller NJ Family which would truly be a vassal family.

3) Even if Butch had the approval of the very Commission itself to have Phil killed, the way in which Phil was murdered - In front of his family, no open casket - changed the whole ballgame. Even though Tony himself didn't mean for this to be the case, Phil was killed in both the most horrible and by Mafia terms, disrespectful way possible; He was killed in front of his family, a no-no, and was denied an open casket - the ultimate sign of disrespect.

Even if Butchie had gotten the approval, members of his own family or other families even might think, "This fucking Tony Soprano is crazy, who does he think he is?" It also sets bad precedent; Jersey could get away with whacking a member of the Commission in such a brutal fashion and even get compensated for the loss of his brother in law? How weak would that make Butchie look as Boss to any Capos/Soldiers who liked Phil? To the other Bosses?

Didn't Tony think about any of this?
Is there any logical way Tony could be alive?