I’d say just phase it out over email. He’ll get the idea. You’ve never met in person. Why lay the “I’m just not into you” speech on him already? If he doesn’t take the hint and keeps calling, then you can give him the usual “I’m just too busy right now, and also my great aunt Hortense suddenly passed so I sadly cannot meet you for Pinkberry and a movie” spiel.
I’ve experienced this before. You get caught up in the excitement of the written word, like two old-timey lovers writing to each other during the war. (Though you’re actually just sitting at your computer in your PJs with your cat and a half eaten Cup o’ Noodles.) Then you actually talk on the phone, or meet up, and there’s nothing. The best solution for this, as I mentioned recently, is to get offline (or off the phone) as fast as possible. A week, ten days at the most. And go easy on the life story emails and 3-hour marathon phone calls before you meet. Keep some mystery for the actual date. The more mystery, the more potential for chemistry and surprise.
But, yes, just slowly phase him out and move on to the next online conquest. Life is full of enough rejection; why should he have to get the slow-burn phone blow-off from someone he barely knows? People get too hung up on online relationships before actually meeting in person. You don’t owe him anything at this point. A friendly email saying you’re busy right now and don’t really have time to get together should suffice if you’re worried about his feelings. But, honestly, I think you can just let it phase itself out. He’s a big boy (presumably) and can hopefully take a hint. And if all else fails, feel free to use that Aunt Hortense excuse.