Every version of Android seems to be different, but edit the contact and try editing the picture (long-press it, short-press it, etc.) On JB there's a menu that allows you to, among other things, delete the picture.
(HTC One running 4.3/5.5) Go to edit contact and tap the current photo at the top of the screen to the left of the contact name and a selection menu opens - you can choose another photo or just remove the current one.
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