Lack of this basic feature is becoming a deal breaker for me. I will have hundreds of images and variations of them as my site grows. I need to be able to sift through them quickly and cull the ones no longer needed. As things stand, that is becoming more and more cumbersome because a simple delete feature does not exist.
I have just sent a message to their "Help" team. I suggest others do the same. Squeaky wheel gets the grease. Go here to do so:
https://support.squarespace.com/hc/en-us/requests/new?ticket_form_id=64337