removeChild
only removes the instance from the display list, display list has nothing to do with game logic actually... you have to either disable your movieclip with a boolean (if you later want to use it then you can enable it) or null the reference, but beware of nulling your reference, because if you try to access it after nulling, you get an error, so you might want to check that if your wall is whether null or not before checking your collision.
if(wall!=null){
if ( !ball.hitTestObject(wall) ) {
// If they didn't find any obstacle keep falling.
ball.y++;
}
}
...
case Keyboard.K:
removeChild(wall);
wall = null;
break;