You're right, the consolidation should actually delete all snapshots (see http://kb.vmware.com/kb/2003638), i.e. automate the manual "Create Snapshot" -> "Delete All" task. However, I also had situations in which this didn't work in the past (and I think it was with vSphere 5.0). Not sure whether this was a bug or whether other issues caused the consolidation to fail.
André