I'm not clear on the difference between a TFS Issue and a User Story. Is there some sort of loose hierarchy between TFS work items? Work Items and Workflow (Agile)
MSF for Agile Software Development v5.0
You can only delete workitems with the tfs cmd tools "destroywitd"
If you want to convert, why not link :) i.e. issue really needs to be a story issue745 ----links to----> newUserStory787