That message might also be referring to that stock item having been sold historically and that there are transactions of some kind tied to it, especially because it's an inventory item. If at any point there are transactions tied to it (i.e. there was once stock, the stock was raised on a sales order or invoiced) you'll probably find that the best you can do is mark it as inactive, unless you can go through and essentially unlink all of the associated transactions (it could be a very large job to do just to track down one item and actually delete it). I'd suggest just marking it as Inactive and moving on.