I would take it out in a heartbeat! :)

HI -- Yes ,remove it .... it is the elephant in the room as they say .

The issue with removing it is it opens a can of worms. Once it's out you have to figure what you will do with the floor and repair the wall. If you aren't ready to change the flooring at this time then mask the brick or even make a feature out of it by adding columns and media or dining storage.

If, as other posters have already suggested, you are prepared to repair the wall and carpeting after you have removed the wall, then, by all means , go for it! It will really open up the space. If you are not prepared to remove the wall, I would have the entire pony wall covered with sheetrock and paint it the same color as the living room; I would also paint the dining room the same color as the living room This would make the space flow and your eye would not be stopped or jarred.

Removing the wall would be best. It looks a bit odd where it is now. Taking out the wall will make the room feel more spacious.

Take it out. No question!