On the People page (admin/people), first select the blocked users and then from the update options select Cancel the selected user accounts. (Drupal 7)
Another way is usingUse the Views Bulk Operations module.
This module augments Views by allowing bulk operations to be executed on the displayed rows. It does so by showing a checkbox in front of each node, and adding a select box containing operations that can be applied. Drupal Core or Rules actions can be used.
You can create a view that shows only the blocked accounts and adds bulk operations to it. In this way, once you select all the accounts with a single click, you can delete them by selecting the operation to do and clicking on the submission button.