First of all, Dietz is not a man to be trusted. What was the point of Dietz and Carmen's night out, really? Sure, she can smack him around, but I can't figure out if he is stupid, power-hungry or both. If he is stupid, then he is hang-dog loyal to Carmen and will do anything he "thinks" may please her--and getting rid of Michelle will please her. If he is power-hungry, he can play out this scenario: Get rid of Michelle, knowing Danny forbids Carmen from doing so. If Michelle is hurt, Danny and Carmen are divided because Danny will never believe Carmen, the family is weakened, and Dietz can make mischief with the business. (personally, I don't think he is that smart.)
Lastly, if he is stupid and power hungry, he can be easily manipulated by outside forces (ie, another "family" that wants to take over the Santos' business enterprises.) Again, he hurts Michelle and divides the family, Dietz gets killed because he was stupid to trust anyone outside la familia, and the Santos family is involved in a war.
Marilea