How could Selig have done anything about it before testing was implemented in 2002? MLB has had a drug policy since 1971, but absolutely no way to enforce it as there was no testing. Even the MLBPA said, "Ok, you can have a drug policy, but if you try to discipline any of our players we are going to vigorously challenge it". MLB, and Bud Selig, couldn't prove anything without testing.
I had this Art teacher in HS that I never really got along with. On the last day of school my senior year he wrote me a letter. In that letter he gave me some of the best advice I received at that time of my life. He said, "Tie your brains to your balls and you'll achieve anything you want to in life". I share that because even if Selig had the biggest balls in the game, his brains would have told him he had no shot against the MLBPA.
And how do we know Selig didn't want to challenge the union earlier but his owners told him not to? They were finally starting to make some money again and everything was going well. Why screw it up? If you ask me, they are more to blame than Selig.