on = vs += and String vs StringBuilder
Your problem is in this line:
 kw = "/"+letters[i];
This is a straight assignment, and will overwrite the value of kw from the previous iteration. Perhaps you want +=. However, at this point you need to know about StringBuilder and why doing += with String in a loop yields bad performance.
Related questions
On regular expressions
If you're up to learning regular expression, you can also do this with one line. You simply match each character x and replace it with /x.
References
Example
Here's a snippet that should be illustrative:
   string keyword = "hello";
   foreach (char ch in keyword) {
      Console.Write("[" + ch + "]");
   }
   Console.WriteLine();
   // prints "[h][e][l][l][o]"
   StringBuilder sb = new StringBuilder();
   for (int i = 0; i < keyword.Length; i++) {
      sb.Append("<" + keyword[i] + ">");
   }
   Console.WriteLine(sb);
   // prints "<h><e><l><l><o>"
   Console.WriteLine(new Regex(@"(?=.)").Replace(keyword, @"/"));
   // prints "/h/e/l/l/o"
   Console.WriteLine(new Regex(@"(.)").Replace(keyword, @"($1$1)"));
   // prints "(hh)(ee)(ll)(ll)(oo)"
Some key ideas:
- Unless you need explicit index, use foreach loop
- When building a string in a loop, use StringBuilder
- When properly used, regular expressions are great!
References
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