Put very succinctly

From the Ethical Spectacle

However, I suspect that the real reason we haven't gone after Bin Laden is because we know he is living in the lawless part of Pakistan near the Afghan border, where the resurgent Taliban are also based. This has rapidly become a new rogue state, not really under any kind of Pakistani military or political control. In addition, Al Qaeda and the Taliban are allegedly sheltered and supported by renegade elements of Pakistani intelligence who originally worked with them on the anti-Soviet effort and haven't given them up in the post-9/11 world.

If this part of Pakistan had been a completely independent state, it would have made a lot of sense to invade it instead of Iraq (I believe we don't have a large enough military to do both). I suspect that the reason we can't do this is that the minute US troops land on Pakistani territory (even such independent and lawless territory) there would be a huge popular uprising in Pakistan, overthrowing our nominal ally the weak dictator-president Musharraf. The result of the incursion would be to drive a huge country with nuclear weapons over to the other side, giving Al Qaeda a large powerful playground instead of a small weak one.