Why is killing Slade Wilson so hard for Oliver?

Oliver still feels partly responsible for Slade's condition, and Shado's death, making him hesitant to murder Slade outright. Even as Oliver begins to accept the fact that Slade is going to have to die, Oliver's focus is always more on protecting the people he loves first, and killing Slade second. Given that Slade already outclasses Oliver both physically and in experience, this hesitation is making it difficult for Oliver to effectively fight back. I also suspect that Oliver still thinks Slade can be redeemed (at least, up until the end of "Seeing Red").

There have only been a few occasions where Oliver was legitimately in a position to kill Slade. His first attempt, setting up Diggle as a sniper in his mansion, showed that Oliver was still somewhat reluctant to assault Slade head on. He wanted to give Slade the chance to "go away peacefully" before resorting to violence, but Wilson was prepared for that kind of attack and it obviously failed. It's also interesting to note here that, even had Oliver gone through with the assassination attempt, it would have been Diggle pulling the trigger, possibly indicating that Oliver himself was still reluctant to do it.

After that, Oliver finally comes to realize the danger his family is in from Slade, but he only has a few opportunities to act on his new found determination:

When he confronts Slade in his home, Thea is missing, and while others were encouraging Oliver to kill Slade then, he chooses to subdue him instead. On the surface, Oliver justifies this as needing Slade alive to find Thea, but it also seems like Oliver is still hoping that Slade can be dealt with in some way that doesn't require Oliver to kill him. It's only once that fails that I think Oliver fully resigns himself to the inevitable outcome.

When Slade infiltrates the Arrow base, we see that even a fully committed Oliver and Sara aren't going to easily be able to take down Slade. He easily overpowers them both in hand-to-hand and steals what he wants. This probably explains why Oliver doesn't simply track down Slade on his own and kill him -- a head to head confrontation would probably end badly for Oliver.

Finally, Oliver does chase down Slade to stop him from using the machine to spread mirakuru to all his minions. This, I think, is the most telling encounter, because he has two separate chances to try and kill Slade. Instead, he chooses to use those two opportunities to a. destroy the machine that was sapping Roy's blood, and b. rescue Roy and escape rather than try to finish off a stunned Slade. In both cases, he's shown that he's prioritizing other's immediate safety over his own desire for revenge.

I also suspect, though I don't know if it's ever been expressed openly, that Oliver is still hoping that he can cure Slade of the mirakuru and stop his rampage. He ostensibly is working on a cure for Roy, but it would be exactly like the new non-violent Oliver to try and redeem Slade rather than kill him.

The Mirakuru makes it more difficult for Slade to be killed, since he's stronger and able to heal quickly, hence why Felicity has S.T.A.R Labs working on a cure.