I came across this problem earlier today, and I realized that it isn’t clear how to delete a team project. It is, however, really easy.
All you have to do is open the “Developer Command Prompt for VS2012” (located in Start > All Programs > Microsoft Visual Studio 2012 > Visual Studio Tools) and type the following command (assuming you have the server mapped in Visual Studio).
TfsDeleteProject /force /collection:https://ID.visualstudio.com/DefaultCollection PROJECT
Replacing the word “ID” with whatever your TFS Online ID is, and “PROJECT” with the name of the team project that you wish to delete.