Should I divorce?

So I'm thinking of divorcing my wife. But is it the right thing to do?

She originally came from Egypt and moved to the US with me three years ago. In the beginning of our two year marriage, I was the happiest kid on the block. Islam was central to everything we did. We went to the mosque, we encouraged each other to pray, we both ate halal, we dressed modestly, we were conscious of Allah in general.

Over the two years of our marriage, I became more and more uncomfortable and less happy. My love for her started to decline. She stopped praying, she decided that the hijab wasn't for her anymore, she stopped going to the mosque, she no longer eats halal, she no longer says a reminder for me to pray or do anything of importance.

When I questioned her about the changes she's going through, she said that she did not feel anything when praying and therefore wouldn't force herself to pray. She no longer wears hijab because it makes her feel like abnormal among society. She no longer eats halal because she claims it isn't as important as other aspects of Islam. She does not think it is wrong to go to a bar and have a glass of water among friends who drink alcohol. She in essence explains all of her reasoning as "times have changed and I am tolerant of people and I will not spend my life thinking of haram, haram, haram." She admits to now living Islam as a philosophy -- being good to people, being tolerant in the sense of being okay to associate with all sorts of things as long as they don't harm anyone, giving to charity, being truthful, and so on.

As much as I love her and how inspirational her view is, I cannot help but wonder about the lack of ritualism and sunnah that she does not put much value on. Anytime I refer to the Quran and Sunnah, she says that she doesn't always agree with them but God will judge her alone. And funny enough, anytime I do refer to these sources as evidence, she sees me being extreme while I view it as being moderate. She ignores hadith thinking it isn't as relevant as it is today.
Consequently, we fight a lot about it and it always ends in a stalemate. For two years, I had been patient. While I try to be patient and conscious about it, I began to see how my Islam began deteriorating. I stopped praying, stopped caring about my own modesty, and in general, I just cared a lot less. While my wife taught me many things so valuable and reflects upon Islam, I lost other aspects too.

Now I'm forced to question the future, our kids, our goals. While I'm a pretty nice guy and would sacrifice many things for my wife, I'm finding it difficult to do considering the way things are going. I used to be optimistic thinking that Islam is not forced upon anyone and God will guide whomever He pleases but I also feel like I cannot wait nor expect for my Islamically philosophical wife to practice real Islam with me.

No doubt that I am not the perfect Muslim and nor do I expect my wife to be perfect, but at the very least I see Islam being the fundamental bridge to our relationship while she doesn't quite see that despite her status being Muslim. I just don't see her taking Islam to heart other than saying la ilaha ila Allah but only God truly knows.

I am at a truly tough position and I am hoping I can see from those who may have been married for years and have seen all the ups and downs, especially in religious matters. I want to make sure I'm not being unreasonable and I want to make sure that I don't regret such decision.

I have done my prayer and a part of me tells me that I should have done a better job indicating whether she would have been a suitable wife and another part of me tells me that I could do a lot better in being a role model and leading by example towards my wife because God knows I have lots to work on.

Edit: I forgot to mention that we have a dog. She insisted on having one though I asked her if she could consider just volunteering at a dog shelter instead. But for the sake of our marriage, we went to get one and we've had it for almost a year. A frustration I have is how she does not train the dog consistently (at all, actually) and it makes matters a bit worse, especially when I want a clean house (I'll take the blame for not keeping it clean too -- I guess men are dogs too!).

Thank you for reading.