The problem is that you are resizing the matrix each time the if criteria is met. This requires a memory copy and is very slow for large matrices.
Instead, use a for-loop and build up a vector of rows to remove. Then remove them all at the same time. Simple example:
N = 20;
idx = false(N,1);
M = magic(N);
for ii = 1:N
if max(M(ii,:))>min(M(ii,:))*N/2
idx(ii) = true; %This row will be removed.
end
end
M(idx,:) = []; %remove all of the rows here!
