Make sure to erase the whole physical SSD which is the item you have selected in the picture. Of course you will need to do this from a macOS installer. I'm not sure the method to "erase disk" within the Apple instructions in the article @Barney-15E linked will be sufficient...it may be, but with an Intel Mac erasing the whole physical SSD is best as it will recreate the whole partition table.
If for some reason even erasing the whole physical SSD still does not give you 250GB (or close to it), then you will have to resort to the command line to destroy the partition table so that Disk Utility will properly erase the SSD. There have been some cases where I've seen Disk Utility get confused if something unexpected occurs with the partition table (usually associated with USB sticks though). I can provide instructions if necessary if the standard erase won't work even after selecting the physical SSD (Apple SSD AP0256 Media).