I hope the basic problem is clear at this point: there is a bottleneck between the keyboard and console applications, that is, the fact that they can only communicate by ASCII sequences. So special keys must be first translated from keysyms to sequences, and then from sequences to key capabilities. Since different consoles have different ideas about what this translation can look like, we need a terminal database. The system would work flawlessly, except for a small problem: it is not always set up correctly, and not everyone uses it.
Applications must have a way to know which database entry to use: this is accomplished by suitably setting the TERM environment variable. In some cases, there is a mismatch between the terminal emulator and the content of the database entry suggested by TERM.
Moreover, many applications do not use the terminal database (or at least not all of it), and consider BS and DEL ASCII codes with an intended meaning: thus, without looking at the database, they assign them semantics (usually, of course, the semantics is removing the character before or under the cursor). So now our beautiful scheme is completely broken (as every Linux user is bitterly aware). For instance, the bash assumes that DEL should do a backward-delete-char, that is, backspace. Hence, on a fresh install the Backspace key works on the console as expected, but just because of two twists in a row! Of course, the Delete key does not work. This happens because the bash does not look into the terminal database for the kdch1 capability.
Just to illustrate how things have become entangled, consider the fix_bs_and_del script provided with the Red Hat distribution (and maybe others). It assigns on-the-fly the BackSpace keysym to the Backspace key, and the Delete keysym to the Delete key. Now the shell works! Unfortunately, all programs relying on the correct coupling of keysym generation and terminal database mappings are now not working at all, as the Delete keysym is mapped to DEL, and the latter to the kbs key capability by the terminfo database, so in such programs both keys produce backspacing.