I think the fair and right thing to do would be to follow your gut instinct. It sounds to me like there are doubts and you should listen to that for your own sake as well as hers. If you cannot give her what she deserves, (which is what you want as well), it simply would be settling instead of holding out for the right one. Some people make better friends than lovers.
In my opinion, if you have to question whether you should continue a relationship, it's probably time to end it. You say that she's a great friend and a great person and that's why you're reluctant to end it, but in actuality, it would be better to end it while the friendship is still salvageable. She deserves to be with someone who desires her and sees something permanent with her, and staying with her is just keeping her from doing just that. I know it will be hard, ending a relationship is never an easy thing but it will be better for you and her in the long run. Good luck.
Well, you wouldn't be the first person to have committment issues. There are people like you that find it hard to feel like this is the "one" and then there are others that feel that way after the first month of dating------- they committ too quickly. So count yourself amonst the masses but be grateful to have the wisdom to question yourself.
Are you wasting your time? Are you wasting her time? Most likely you are. If you know that you'd like a life long partner in which you feel more than friendship and love but also have strong sexual desire for--------- then this is wasting everyone's time. I agree with you. You shouldn't start a marriage when a key element is missing. The hot new romantic wears off with time . . . but a strong sexual desire for your mate shouldn't. Ya know? I imagine you've felt like something was missing in that area for a very long time. If it isn't that important to you--------- then this relationship sounds quite comfortable for you and solid. But if you want to feel that sexual intimacy is where it should be with a couple, then you need to move on.
Honestly, I didn't really need to write any of the above. I think the sentence in which you describe her as a great friend says it all.
She is of an age in which the kind thing to do is to let her go. She deserves to be with a man that lusts and loves her as a romantic partner and more than a friend. You deserve to have that kind of relationship as well.
It is really hard to break up from someone that we love and care about and not know what lays ahead in the future. But I think your question is valid and your gut is telling you what to do. I wish you luck in every way!