Although more recent versions of JIRA remember dead projects and block the re-creation. I don't know if there's a way to supress that. The other problem is if you have issues you have moved out of the "dead" project. Let's say you create ABC-1, ABC-2, ABC-3, then move ABC-2 into XYZ where it becomes XYZ-45. Then you delete project ABC. If you now search for ABC-1 or ABC-3, you will get "issue is not there", but ABC-2 will give you XYZ-45. If you delete and reset the numbers, when you create ABC-2, you may find some odd issues with it, especially if it was ever in an Agile Sprint (although the behaviour should be that ABC-2 now refers to the new one at all times)
I agree with Nic. The safest course is to create a new project and remove all permissions to the old one. I recommend never deleting anything unless it was a project used to test JIRA schemes or train folks on JIRA. Anything that was ever production might be called for again. Just search the forum for reference to how to undelete or restore issues or projects and you'll see it WILL come back to haunt you or your replacement someday.
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