For starters, stop agreeing to go out with him if you don’t like the guy. Your intentions might be honorable, but you’re stringing him along with false hope of a relationship, and that does neither of you any favors.
I think you can still let him down with his dignity intact, though. When he asks you out again, just have other plans, and continue to be unavailable every time he asks until he gets the hint. If he never gets the hint, or asks you directly why you’re dodging him, then you can tell him that you’d rather just be friends. You can sugarcoat it if you want — “I think you’re a great guy,” “It’s not you, it’s me,” blah blah blah — but that stuff is pointless because guys know it’s BS. Just be direct if he presses; not rude and not detailed (don’t fall into the “Why not?” trap). Be direct and firm: No, thank you. Yes, I’m sure. Let’s just be friends.
If his feelings get hurt, they get hurt. That’s beyond your control. All you can do is be kind and direct. The rest is on him. Rejection is part of life and it hurts no matter how gently you let someone down. He’ll live, though. We all do.