Compensated emancipation could have been a feasible solution if the only incentives to retain slavery were economic/financial, but they weren't. Chattel slavery was a labor system, but it was also a social/cultural system that operated to the advantage of southern whites. Under the "mudsill" theory propagated by James Henry Hammond of South Carolina, every society on earth had to have some kind of bottom rung of its social system to perform the most dreary kinds of labor, and for the white South that was the enslaved population. Ownership of slaves also operated as a status marker for property-owning whites. It is important also not to rule out the importance of plain old racism. Many southern whites were deeply afraid of "amalgamation" of the races - the term miscegenation would not exist until 1863 - and a freed black population would be far more able to intermingle with whites, specifically white women. The white South operated partly under what we sometimes call a "herrenvolk democracy" which preserved at least nominal equality for all white men ensured by racial unity against enslaved black people; if you were poor and white in the South, there was at least somebody below even you in the hierarchy. The white South's interest in slavery went far beyond the enslaved person's value in terms of labor.

On the practical side, financing compensated emancipation would have been extraordinarily expensive given both the total value of all enslaved persons in the South, especially in light of the absence of any kind of central bank capable of issuing that kind of credit. Additionally, compensated emancipation would also have meant accepting federal jurisdiction over slavery, which was the object of much of the dispute between North and South.

Readings

James Oakes. The Ruling Race: A History of Southern Slaveholders

Bertram Wyatt-Brown, Southern Honor: Ethics and Behavior in the Old South

Kenneth Greenberg, Masters and Statesmen: The Political Culture of American Slavery

Lacy Ford, Origins of Southern Radicalism: The South Carolina Upcountry, 1800 - 1860