I wondered about that, too. Vito had obviously decided against Sol even before he heard his proposal. The novel tells us that Vito told Tom, at Connie's wedding, that Sol would propose "an infamia." When Tom went over his notes on Sol before the meeting, Vito said: "Do you have it in your notes that Solozzo made his living before the war in prostitution? As the Tattaglias do now. Write it down before you forget."

So, why did he have the meeting with Sol, and why did he have everyone present for it? I'm guessing two reasons. First, he wanted to appear "reasonable" to Sol and to Tattaglia. Refusing to hear Sol out would have been gratuitously insulting to both. Second, he wanted everyone to hear his "no" and his reasons, together and at the same time, so they'd all be witnesses his "no"--and to each others' hearing that "no"--to discourage them from trying to do a deal with Sol on their own, or to start dealing drugs with someone else. Vito wanted everyone to know, unambiguously, his opposition to drugs--and why he was opposed.