I don't believe that Fredo had to be whacked.

If exiled, he would not have been a threat to the family (or the Family). He was too stupid to mastermind anything and too scared to go against the family. I also do not believe that he knew it was going to be a hit.

Mentally and emotionally, Fredo was a child. C'mon, he thought Hail Marys help you catch fish. He was easily manipulated. He was impulsive, selfish, and venal. He had a temper.

But he was repentant, and he was no continuing threat to Michael and his killing was a new low - even for someone like Michael (as he comes to realize).

"A man in my position cannot afford to be made to look ridiculous!"