While we don't recommend or support the removal of the Blogger navbar, there is nothing in our Terms of Service that explicitly mandate its use.
As far as actually doing it, it requires just a simple 5 minute template edit (10 minutes, including backing up the template, twice).
I will, however, point out that, if you publish your blog for people other than you to read, you will probably have happier readers if you leave the navbar in place. As time goes on, and Blogger improves the navbar, you'll find more and more reasons why removing it is just not a good idea.
It's your blog - but it's your readers blogs, too.