So just what does it take to end the life of a Pokemon? We know that (some of) them do in fact die at some point, but how?
Well, don't forget that pokemon have limits. Charmander's Ember is a MAGICAL flame that can't destroy Caterpie's MAGICAL body, if you want to think of it like that.
It's also possible that pokemon hold back on their powers in-battle so they only faint opposing pokemon.