I know it sucks now and you feel horrible, all these feelings will
pass. Just stop and look at the picture as a whole: You know deep down in your heart that you or him wouldn't be giving it your 100% all. And who knows maybe someday down the road of life you will become reunited with him?
Or you wouldn't want to stick with it and possibly have regrets or have that thing pecking at the back of your mind, always wondering.
My trainer does the same thing, he will tell a client that unless they want to spend thousands of dollars and alot of time, their horse isn't going to be doing what they want him to do. And boy do clients appreciate honesty, he could either do that, or do what some trainers do; take the money and try to cram as much training into a small amount of time as possible. And he will tell them if they're being unrealistic with the expectations of a certain horse. Like one person who was expecting their horse to be turned into an A circuit horse in a month, he told them, "that ain't happening, esp because your horse is green." Needless to say they left and found another trainer who actually told them that it could be done.
Don't look at is as giving up, because you're not. You're opening yours and his future. And besides you're not the first person, nor will you be the last person who sells a loved horse.
I wish you all the luck <3 Feel free to PM me if you need anything!