Logic is on your side again, pl. But I want to advance another (admittedly stretch) theory:
I think Vito's long-range goal was to legitimize the Corleone family's business, and Michael would be the key player. Michael would get his law degree. He would then run for Congress. Yes, he'd be highly vulnerable as Vito's son. But Michael could establish residence in Little Italy or Long Beach, where Vito's tremendous political clout would assure him of the nomination. TV wasn't strongly established in the immediate postwar years, and Vito could have bribed the local newspapers to downplay the Mafia connection. There's a good chance he'd be elected to Congress.
The next step would be for Michael to run for Senator or Governor. This would greatly raise his exposure to "Mafia" charges. But he'd have a solid track record in Congress, his war-hero reputation--and his father's money and influence behind him. He might, just might, get elected.
Now, obviously, he'd have to publicly distance himself from his family during his political career. Is that what Vito really wanted? No. I think that, if Vito had had his way, Senator or Governor Corleone would have moved to legitimize the Corleone family businesses by pushing for legislation to legalize gambling at the national or state level (depending on the office he held), and by channeling the Don's ill-gotten labor support (and union money) into his (Michael's) political machine. The money and influence would continue to flow, but in "legitimate" ways that would make Michael an invincible political force. The family would then have less and less need for violence and corruption. Sonny would be the head of an ever-diminishing "muscle" end of the family. Fredo could continue his cocktail-waitress adventures.