In the US at least, firing is really easy. "any hiring is presumed to be 'at will'; that is, the employer is free to discharge individuals 'for good cause, or bad cause, or no cause at all,' and the employee is equally free to quit, strike, or otherwise cease work."

Managers are people. I'd imagine there's a fair amount of guilt and shame around firing someone. I also think managers underestimate the damage done by crappy employees, and overestimate the difficulty in replacing people.

Less charitably, people given the power to hire and fire are likely selected for doing what they're told rather than doing what's best for business, so they're probably kinda spineless.