Hi T.:
I don't thin you can remove it once it is imported that way. But letterboxing begins as soon as you switch from Camera mode to Edit mode and click on a clip. To keep this from happening next time, don't switch modes after you’ve imported your video. Don't to the "Edit" mode, stay in Camera mode. Save the project, quit iMovie, and turn off the camera. When you reopen the project, the video will stay 16:9.
I believe I read that in David Pogue's Missing Manual book-so I'm sure it works..
Sue