The narrator hesitates to kill the elephant because by the time he arrives at the place where the elephant has been on a rampage, the elephant is peaceful. The narrator realizes the animal no longer poses any threat. It would be an economic waste to kill such a valuable animal, it would be cruel to the animal, which would die slowly, and overall, there is no reason to destroy it.
Nevertheless, the narrator has asked that his elephant gun be brought to him for self defense. When it arrives, the narrator is willing to walk away from the elephant. However, he suddenly recognizes that he is expected to play a starring role in a drama unfolding in front of the eyes of a crowd of Burmese native people. If he does not kill the elephant, he will look weak to them. Therefore, he does so, even though it is unreasonable and inhumane. As he kills the peaceful beast, he has a moment of realization:
And it was at this moment, as I stood there with the rifle in my hands, that I first grasped the hollowness, the futility of the white man's dominion in the East. Here was I, the white man with his gun, standing in front of the unarmed native crowd—seemingly the leading actor of the piece; but in reality I was only an absurd puppet pushed to and fro by the will of those yellow faces behind.
In order to survive in an imperial system, the narrator must put appearances ahead of good sense and humanity. This way of life is repugnant to him.