Error deleting Web site "/subsite001". You can't delete a site that has subsites.

Error deleting Web site "/subsite001". You can't delete a site that has subsites.

 This error occurs when user deletes a subsite using the 'Delete This Site' button under Site Administration of a site.

Resolution:
Go To: Site Actions > Site Settings > Site Administration: Content and Structure
There check the box besides the web and either select delete button from the ECB or from the top Actions menu.