Actually got the answer from Rigo. ...
The system will only allow you to dispose on them. However, there is function in Mass Maintenance to purge the out of the system and leave partial information of the assets in one table, which is the purge table. The asset does not need to be disposed, you can purge active assets.
To purge an asset, you will need to the following:
1. create an Asset Group, located in AM\Maintenance\System\Asset Groups. Select the asset control numbers that you want to purge out of the system. (note: the system does NOT like group codes with numbers in them - keep it letters and simple)
2. Once the Asset Group has been created, go to AM\Maintenance\Mass Maintenance\Purge Assets. Select the Group Code, which would be the Asset Group you just created. Go to tab 2: Asset List and confirm that those are the assets that you want to purge out of the system. (NOTE: There is bug with zoom on group code - so you'll have to enter it and tab through - instead of pick from list)
3. Once the asset list is confirmed, hit the Activate button. You will be asked that the asset is in an active state, hit continue. Because the assets are still in a Current State of Active, you will be asked that same question throughout the list of assets to be purged.