You are right for all the reasons stated,kand also because it was always the philosophy of the Corleone family that traitors planning assinations of the Don had to die. Fredo should no more have been spared because he was Michael's brother than Tessio should have been spared "for old time's sake."
"Io sono stanco, sono imbigliato, and I wan't everyone here to know, there ain't gonna be no trouble from me..Don Corleone..Cicc' a port!"
...I agree with Michael's decision. 