I always thought that Vito wanted Michael to be a civilian and not part of the family business. When Vito learns it was Michael who killed Sollozzo and McKlusky, Vito kind of waves them off, as if to say, "I never wanted this."

In the garden scene, Vito even says that he thought Michael could have become a senator, or even something more.

No doubt that being a senator he still would have had the family's interest at heart - and another way to gain influence within the authority - but at least he wouldn't be in the middle of wars, etc.

I think Sonny would have been Don by default. Vito couldn't deny his oldest son the position. Imagine the power struggle that would have happened had Mike, a war hero and otherwise civilian, being picked over Sonny to be the next Don.

That would have been interesting...