Inventory records must be kept so there is a paper trail of the product and everything that has happened with it.
If you want to use the SKU on another product please add -OLD to the end of the SKU in question and mark it as Discontinued. This will allow the SKU to be used on a new product but keep the inventory record.
Example
SKU: Mintsoft
Updated: Mintsoft-OLD
This would allow the SKU Mintsoft to be used on another product.