Just a couple of thoughts: First of all, don't throw them out now, for god's sake. What will you do with their players? Who will manage their teams? Mid-season "expansion" drafts are contenious, and having three dead teams in a dynasty league has to be worse than having three teams that maybe or may not be trying. I think throwing them out now would be a disaster.
Second, I have to say that I'm not sure you have grounds to throw them out -- especially if this is a money league and they've paid up. Have they broken any league rules? Violated an actual policy? It sounds like they're not in the spirit of the league, totally, but what if instead of being a little sluggish they made a ton of trades no one agreed with? Not collusive, just head-scratching. Would that be grounds to throw them out? No. And maybe this difference in managerial style is a difference of that type.
Finally, if you really decide you want them gone, can't you just not ask them back when things get rolling next year? I mean, since they're not friends with anyone anyway, who they going to complain to? An off-season re-drafting of their players could probably be done in a more fair manner than a mid-season re-drafting. Or maybe you could find owners to take over after the season . . . although you should be careful that the devil you don't know isn't worse than the one you do.
Anyway, just my two cents. It's your league, do whatever the hell you want, but a mid-season boot seems unfair and difficult to manage.
PS There always has to be someone in last. Can't always throw that person out.