Apple has introduced the possibility of deleting an app. Quoting the iTunes Connect guide:
If you have created an app in iTunes Connect that you no
Refer to: see Removing an App From Sale (page 92) section on iTunes Connect Developer Guide 6.3
Follow Instructions Below:
Click "Rights and Pricing"
Go to the sale territories section. There is a link near the end.
Click on the "Deselect all" button to uncheck all App Store territories.
Click on the "Save Changes" button.
Now when you save all of these and then go to back to your App icon home screen there will be one more button that will appear called “Delete Application” located after “Set Up iAd Network”
Click on that "Delete Application button" and read instructions
After removing all assigned territory checkboxes from your app in the Rights and Pricing section, and clicking "Delete Application", the status changes to Developer Removed from Sale and your app will not be seen on the App Store within 24 hours. The name you were using for your app will also become freed for other developers' use.
Hope this helps!!!