Delete Application from iPhone 5.1 Simulator
Go to the iOS simulator menu and choose Reset Content and Settings...



Why this happens is harder, but it's just development and you are working with a simulator, not a real device. Sometimes it's faster to get out the broom and clean the floor to start freshly.

If you are curious, the simulator filesystem is stored in the following location:


  ~/Library/Application Support/iPhone Simulator/version


So if you want to poke around and delete things, you could try to exercise the phantom app, but I don't see you saving time by somehow editing the filesystem and hoping the simulator would work once it's broken in the manner you describe. The normal way to delete an app is to press the X and since that's broken, who knows what else is out of sync. Better to start fresh and not waste more time when the system says there is a problem with the simulator.