Yes I'm aware of this but haven't had time to think of a better solution. To me the keeping of version history is contrary to deleting a file, it should ideally be possible to recover a deleted file when version history is enabled. I'm not sure when I will get to a better solution but it seemed prudent to at least not physically delete the file in case someone really needed to recover it.
Ultimately I guess we will need to just flag a file as deleted when this is enabled and ad a page to find and recover deleted files. But its fairly low priority in the grand scheme of things in my plans. I may at some point make a pro version of Shared Files that would be more elaborate.