Michael never understood that he could never achieve real legitimacy as a crime boss while posing as a respectable businessman. He never saw that the "legitimate" people he associated with would never consider him one of them because their "legitimacy" would be tarnished by his overt criminality.
Sort of like in the Sopranos when Tony tries to golf with a couple civilians only to find out that they only brought him along as a sort of novelty, a flirtation with the dangerous life of a mobster.
