Good analysis, dt. But I still wonder just how "legitimate" Michael was:
1. We saw at the beginning that Michael was still the power in the Commission (Vincent: "Zasa knows you're keeping him from rising in the Commission"). He might have cut his ties to the Commission in that AC meeting--or he might simply have been distributing ill-gotten gains from his gaming enterprises that the others invested in. That leaves the question of whether he still was a member of the commission.
2. He engaged in bribery of a corrupt Archbishop to gain the Vatican's vote to become head of Immobiliare. Bribing your way to "legitimacy" doesn't make you "legitimate."
3. Why did he need Immobiliare to be "legitimate," when he'd already been made a Papal Knight for his foundation giving and his generousity to Sicily? Immobiliare was a real estate holding company. I've always thought that his desire for Immobiliare was to use it as a money laundering operation and a basis for possible European shady ventures--real estate is a perfect cover for moving ill-gotten gains.
4. He appointed Vincent as the new Don. Of what? Handing over the remainder of his "illegitimate" empire to a personally selected successor didn't constitute "legitimizing" Michael--it constituted perpetuation of a criminal empire. And I believe Michael had two purposes in anointing Vincent: to get Mary away from him so she could marry someone "legitimate," and to use Vincent as his muscle (or threat of muscle) to scare his foes while he turned Immobiliare to his schemes.

I believe Michael was a born criminal. He had innumerable chances to put the criminal life behind him--and he chose crime every time. And every time, he won battles and kept losing the war. That's why I believe the moral of the Trilogy is: Crime Doesn't Pay.