Stringer was shown to be wrong and full of hubris at every turn.
Avon's "not hard enough for this game and not smart enough for the game out there" speech was definitive.
There is no conflict. Avon won and is still shown to be king (paid tribute by Marlo, runs things from Jail, Slim keeping his seat warm) while Stringer is gunned down both figuratively by his business partners and literally the streets.
Stringer's jealousy led to the downfall of the Barksdale organization.
But so did Avon's stubbornness.
If he had given Stringer permission to move Prop Joe's product in Season 2, then Stringer would've never felt the need to try and set up Mouzone and Omar to kill each other.
All of that was done to cover up the deal he made with Joe.
Now, Avon's argument was that it would've given Prop Joe too much influence over the Towers.
However, if Stringer doesn't make that deal with Joe.........they lose the towers altogether because they didn't have any other options available.
All of the suppliers Avon suggested were trash.
Keep in mind, the Barksdale organization wasn't really the Barksdale organization.
It was the Barksdale and Bell organization.
So, again, if they had managed to stay on the same page........Marlo would've still been a threat, but he would've eventually got dealt with.
If you remember, towards the end of Season 2..........Avon relented and agreed that the deal with Joe made sense, but by then the damage had already been done with the botched hit on Omar and Mouzone.
That right there shows that Stringer wasn't as off track as you think because, if he was, then Avon would've never realized that String was right all along about needing to work with Joe to stay in business.
Basically, Avon's stubbornness led to Stringer fucking up to save the business.
If he had just listened to him from the jump, the Barksdale organization would still be in power............Avon wouldn't have had to agree to Stringer's death to keep his line open to New York...........and Stringer would've never felt the need to lock Avon up.