Hi David,
I just upgraded to 1.2.15 and the delete is working successfully:
Thu, 10 Jan 2013 09:51:36 +0000 1357198620: over retain limit; will delete this database
Thu, 10 Jan 2013 09:51:36 +0000 Delete this file: backup_2013-01-03-0737_avggeek039s_Blog_b018cc9cacaf-db.gz.crypt, service=s3
Thu, 10 Jan 2013 09:51:36 +0000 S3: Delete remote: bucket=avggeekwordpress.backup, URI=backup_2013-01-03-0737_avggeek039s_Blog_b018cc9cacaf-db.gz.crypt
Also thanks for adding Chunked uploads for S3 Backups. It should prove very useful as the others backup size grows.
Did what I can on the contributions side ??