There's a reason you can't delete it: that will include your bootloader, operating system & radio firmware as well as the system apps you can see in your app drawer. If you could delete that your phone would be reduced to a paperweight.
The trouble is that these storage menus (which vary between manufacturers and software versions) aren't very clear about what they mean: in trying to be "friendly" and not lose people in technicalities they are very imprecise. I would expect that a large fraction of that "system data" size is actually the size of the system storage partitions rather than data. At one level that makes sense: you can't use the system partitions for your apps and data (which live in their own partitions), so all of that space is unavailable to you, so they may as well count it as "used". But on the other hand the labelling is misleading because it gives the impression that this is all data that you could clear up to create space. It's possible that some of it is, depending on what else they've included in that category, but I would expect the system partitions to take between 2.5GB and 4.5 GB, so my guess is that most if not all of this really is the system space. It's always important to remember that when a manufacturer says the device has "8GB storage" that's not 8GB that you can use, it's 8GB including the space used by the operating system and lower-level firmware, so an 8GB device typically only has about 4GB available to you.
If you want a clear idea of how much space you really have and how much is used, install a little app called "Storage Truth" from the Play Store and run it. The space available for your own apps and their data is a partition called /data, and this app will tell you how big that partition is and how much of it is used.
