Some (many?) people do kill themselves, being unable to cope with the trauma of being sexually abused as a child. I don't think it's a useful approach to state that execution is "worse" and to consider the legality of the images by comparison.

I think we should view "simple possession" of society-harming materials as a health issue and not a criminal one; same as with drugs of all kinds. Pedophiles have a mental disorder and if we as a society believe in the ability of individuals to overcome their primal predilections and behave legally, then we need to help them do so and not punish their thoughtcrime. But it's difficult for most people to stomach the risk that an innocent person will be hurt because we didn't take drastic measures to eliminate holders of drastic thoughts.

I don't know the actual chance that a pedophile-in-thought will become a pedophile-in-action, but consider: if it was a 50% chance, would you be okay letting a demonstrated pedophile-in-thought run free, until they actually demonstrated their inability to restrain themselves? Knowing that at least one (and probably more) vulnerable persons would be irreparably harmed before the damage could be contained.