Michael wanted Roth to think that he believe Pentangeli was behind the Tahoe shooting, so to do that he acted as if he didn't care about the Rosato's eating into his territory. After all Pentangeli was "small potatoes."

On another level, this is one of those instances where Michael's hubris shows. As much as he is trying to be legitimate, he is offended when Pentangeli comes to his house, and more or less tells him that he no longer understands how things work on the street. After all Michael now drinks "chamoagne cocktails." Michael wanted to show Pentangeli and all those around him that he still had his finger on the pulse everywhere. We see this again in III when Michael is trying to interfere with the rise of Joey Zasa.