This was asked for in the recent survey, so now it is available.  You can now edit the list of payees.

A payee is still created by creating a transaction using the payees name.  However now you can choose to hide specific payees so that they do not appear in the list, you can delete payees, and you can change a payees name if it is mis-spelt.  However deleting a payee and renaming a payee does not have any impact on any existing transactions using the payees name.