Rb_stern, I had the same exact problem with my Nexus 5! I tried just about everything to delete that stupid album and this is the only thing that I found to be successful.
First, go to Settings --> Accounts --> Google, and disable Pictures sync.
Then, go to Settings --> Apps --> All, and scroll down until you find gallery. When you find it select "force stop" - then press - "clear data". It will delete the auto backup album and keep all of your regular albums.