I've been rewatching Season 1 of G1, and Starscream is constantly undermining Megatron. He is so indiscreet about it though... he'll openly discuss his plans to mutiny against Megatron. Megatron frequently threatens to take out Starscream, but never seems to do so.
Why didn't Megatron ever kill Starscream?
From the Transformers Universe book:
Megatron overlooks the potential threat Starscream represents for one very good reason: Starscream is very good at his job.
Online entry: Starscream.
At this stage in the Transformers canon, the Deceptions are fairly few in number and substantially outnumbered by the Autobots. Compare the list of troops on both sides here.
The Decepticons are typically outnumbered in G1 Season 1 but compensate in other ways, such as with their ability to fly.
Megatron, newly reformatted as Galvatron, finally killed Starscream in the 1986 animated movie, following Starscream's treacherous usurption of Megatron.
The main reason behind this is Megatron's own ability to perceive the attributes of Starscream. Perhaps he sees a little of himself in Starscream, if not the physical part, at least the "cunning part" definitely. This prompts him to reconsider his decision of killing Starscream; Starscream may inadvertently come up with a useful idea to demolish the Autobots, which Megatron then can use at his own discretion.
Having said that, Megatron is in a dilemma. He is constantly toying with the idea of either having Starscream terminated or banished. He seems just not able to make up his mind, due to his past association with Starscream. Also, due to the same reason he may think, that Starscream will never be able to outwit him.
The pragmatic answer is that The Transformers was basically a soap, and you rarely permanently kill off characters in a soap, as it just limits your options for future storylines. Realistically, the ruthless Megatron would incinerate an openly rebellious subordinate in a heartbeat. Perhaps he has a soft spot for Starscream and / or doesn't see him as a serious threat. But if Megatron was in the wrong mood, or Starscream was disloyal once too often, he'd be done.
It's the same reason Batman never kills the Joker; it would make obvious sense to do so, but something something the good guys need to hold themselves to a higher standard. Basically, Batman would have had a pretty short run if he'd killed all the supervillains he'd caught (rather than 85 years and counting).
