There are two, maybe three. main reasons. 1. There are murderers on the list - people who planned and facilitated bombings that killed dozens, or scores, of people. Netanyahu does not want to release murderers, and he knows there is resistance among the public for this action. 2. There are political leaders on the list. Netanyahu certainly doesn't want to release some of the political leaders; although one was recently release due to the legal process - probably out of Netanyahu's control. 3. Netanyahu doesn't want to "lose" to Hamas. This is entering the realm of psychhology; national pride, etc so it is harder to prove, but I suspect it is no a trivial consideration in all this.
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from the article: Convicted Hamas murderer: Shalit swap deal won't increase terror