As I've said, the API works fine, both for adding and for removing users.
However I've noticed that removing users via the ordinary GUI does not work.
I'm talking about Options->users->Who can view and post, and then clicking Remove user.
The user disappears from the list, but when you refresh the screen, the user you just deleted is back. Not a problem for me (I'm happy with using the API to manage membership in my private group) - but maybe others prefer the GUI?