An inactive affiliate cannot steal from you. Their links may or may not function and they don't get paid so what's the beef other than perhaps out of date creative. A polite request for them to remove links should suffice.
As for whether an affiliate should be removed from a program for inactivity well I am not going to comment much on that. Removing an inactive affiliate from an entire network does happen and some networks activity and zeal in doing this verges on paranoia.
I shall give you two examples of relevance which happened to me.
One merchant I joined a year ago. Two months ago finally built a niche website to promote them. Now featured high in the SERPS. Merchant is happy as I emailed them on joining to say I would take my time to list them and promote them properly so don't expect any results for a long time. I run loads of sites and there are only so many hours in the day.
The second example concerns a network. Signed up December 24th 2007. Their automated system threatened to ditch me from the network end of January 2008 if I was not performing. Wrote to them and they rescinded apologising that because I was registered in 2007 and they do an annual check of active affiliates, because I had not generated anything they were automatically ditching me.
Needless to say back on there and listed. Now both sites where I promote for that network and that merchant are on Page 1 of Google and have been since trawled and both sites have attracted the interest of dropshippers offering me dropship retail deals for both niches paying an average 12-25% per product and that includes the merchant who waited a year when his program offers 10% and now he's offering me a 25% dropship deal.
So do not be hasty to ditch affiliates. You may be making a huge mistake. Instead ask them kindly to submit a sample url where you are advertised and after reviewing the link, offer them ways to improve performance.
One final note:
There is on average 1 merchant to every 12 affiliates in the world and 98% of affiliates are slow performers. There are plenty of merchant programs out there for affiliates to promote and the affiliate manager or merchant who blithely assumes that affiliate marketing is the main stay of the business is a poor affiliate manager or merchant. Affiliate marketing should complement existing business models and not be the main source of revenue.
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