There's fault on both sides, but I still mainly side with Vince on the matter just because um.... wrestling is FAKE, okay? And for Bret to react they way he did over a title that was only GIVEN to him in the first place to persuade him to stay with the company is pretty silly. I mean, Bret really acted like he was Muhammad Ali being forcefully stripped of a title that he earned all by himself and that just isn't the case.
Bret had been around the business his entire life and he knew the routine, yet he chose to believe he was entitled extraordinary perks just because of who he was, which was arrogant and selfish. And his stories aren't consistent either. At one point he mentions that he wouldn't drop the belt to Michaels at all because of how bitter he was towards the guy, then later he says he just didn't want to lose in Canada and he would have dropped the belt to Michaels the next day on Raw since they would be back in the States that day, and yeah... there's just so much uncertainty as to how that would have gone down. What if Vince actually agreed to that and Bret changed his mind at the last minute prior to Raw (because you KNOW he would have stayed up all night after Survivor Series thinking it over, completely lost in his own hype) and decided not to show? Or just flat out demanded another opponent besides Michaels? There's no telling how that would have transpired or NOT transpired.
Of course, I won't put it all on Bret because Vince could have done some things differently too. He could have confiscated the belt after Survivor Series after allowing Bret to win and held it over night for reassurance that Bret wouldn't run to Nitro the next day and pull a Madusa. Technically, his contract DID allow Bret to have creative control over his departure, which was also Vince's fault for giving him that power. And just in case he just didn't show for Raw, they could have had their Survivor Series match end in another controversial fashion, like Bret using the ropes for leverage on a pin or Michaels's foot being underneath the rope, or having Bret smack Michaels with a chair when the ref wasn't looking... really anything they could have used the next day in the event Bret didn't show up so they could work it into a story line as "Bret cheated to win, so he's stripped of the title and now tonight will be a tournament to decide the new champion" which then Michaels could have won. They could have even had a rematch between Undertaker and Shawn Michaels that night which would have drawn great ratings considering those two were heated rivals in late 97. There are SO many ways Vince could have handled that situation besides a screwjob, but I think Vince actually preferred something controversial like that because it put a lot of heat on him and put a lot of eyes back on the WWE product, even if it was for bad reasons.
But I still have to put more of the blame on Bret just because of how unwilling he was to compromise and saying things like "I won't lose to him" or "I won't lose in this city" is absurd. Bret flew too close to the sun and he got burned. Pity for him.