sed '
        s/\(.\)\^H\1/\1/g
        s/\(.\)\^H\1/\1/g
        s/\(.\)\^H\1/\1/g
        s/\(.\)\^H_/\1/g
        s/_\^H\(.\)/\1/g
        s/.\^H\(.\)/\1/g
 '|sed '
        /^$/{
                :l
                $b
                N
                s/^\n$//
                t l
                }
 '

or in C:

$ cat mysrc/manclean.c

#include <stdio.h>

static void p_putchar( int c )
{
        if ( c != EOF
          && EOF == putchar( c ) )
        {
                if ( ferror( stdout ) )
                {
                        perror( "stdout" );
                        exit( 1 );
                }

                exit( 0 );
        }
}

main()
{
        static int c ;
        static int c2 ;
        static int c3 ;
        static int ct = 0 ;

        do
        {
                switch( c = getchar() )
                {
                case EOF:
                        if ( ferror( stdin ) )
                        {
                                perror( "stdin" );
                        }
                        continue ;

                case '\b':
                        if ( ct < 2 )
                        {
                                ct = 0 ;
                                continue ;
                        }

                        c2 = c3 ;
                        ct = 1 ;
                        continue ;

                case '\n':
                        if ( ct > 1
                          && c3 == '\n'
                          && c2 == '\n' )
                        {
                                ct = 2 ;
                                continue ;
                        }

                        /* intentional fall through */
                default:
                        break ;
                }

                switch( ++ct )
                {
                case 1:
                        c2 = c ;
                        continue ;

                case 2:
                        break ;
                default:
                        p_putchar( c3 );
                        break ;
                }

                c3 = c2 ;
                c2 = c ;

        } while ( c != EOF );

        switch( ct )
        {
        case 0:
                break ;
        case 1:
                p_putchar( c2 );
        default:
                p_putchar( c3 );
                p_putchar( c2 );
                break ;
        }

        exit( 0 );
}