404 is a good way to tell Google that a page is gone, which will then help it drop from index. Removing it from a site map won't remove it from index.

If you can't 301 to a good page for a user experience (for example, it'd be jarring to click on a SERP for a bike tire and be 301'd to a page about women's bike shirts) then there's not a lot of value in doing so.

We don't even bother populating that section any more. Now, that said, Bing does care about them to some degree, so it depends how much you may care about that search engine.

Matt Cutts has specifically said Google doesn't care about meta keywords, so I find it surprising that it'd be used to penalize.

I agree with Oleg; if most everything is the same, even with multiple pages, users may not bother to tell the difference and will contact the wrong site anyway. Thus that creates more work for your internal staff. If you were in multiple countries, different story (perhaps).

And there's less back end to manage, which can be a huge obstacle to SEO if you don't manage it well.