Mickri, I have a friend that sharpens his 4 flute end mills, by hand at a normal bench grinder. It is one of the many skills it is possible to learn while progressing in machining. You won't ever get all 4 flutes cutting that way, but you can reuse a wrecked mill a long time that way.
Second, If you are messing up your end mills, carbide or HSS, you are doing something wrong. There are thousands of things to target here. But even on moderately hard steel (Rc 30 and below), HSS end mills will do the trick if you are careful. If you buy centre cutting end mills (which you should), in good quality, you can plunge mill your keyway, and then finish mill it after.
For 40 years I have been in the 'it isn't a problem to mill keyways and slots' camp. It isn't a lie, it just takes skill.
If you are trying to mill a slot in a very hard (Rc45 or higher) or carburized shaft, all bets are off. All that takes is a file to test, and if it skates, then a far more careful approach is required.
Another factor is your setup. With a tiny mill like you have it takes MORE skill to do a great job without wrecking tools. To reduce deflection in your column, take light cuts with a 3/8 end mill - it will result in 1/4 (approx) of deflection force on your column. You will need to run higher RPMs and take plunge cuts. Cutting using the X feed with a 1/2" end mill may be part of your problem.
Here's a good video on plunge milling: