I am quite amused to see that a tag "seo" exists. I noticed that because I just saw a question which gets a downvote every five minutes... I had a look at the list of other SE sites and found the one for webmasters. This makes me guess whether there can possibly be a question correctly tagged as SEO which is on-topic here.
2There are some questions that are vaguely related, like using virtualhosts to increase your SEO, or implementing 301's for canonical URLs, but SEO is typically a side-effect that doesn't need to be a tag on its own– Mark HendersonApr 16, 2013 at 5:19
@MarkHenderson Implementing 301's (particularly with .htaccess) is very much on-topic for Pro Webmasters.– MrWhiteApr 16, 2013 at 15:13
Your question is closely related to the previously asked Distinction between Serverfault and Webmasters which you may want to read.
As you've correctly surmised, most questions about how to perform search engine optimization will find a good home at Webmasters. In the early days, before Webmasters was created, those questions invariably were asked here (or even on SO!) and some of those questions may still be open. Feel free to vote to close them.
There are occasional bits of overlap, though, and things that may have an impact on SEO that are more appropriately asked here, or which could be asked on either site (such as mod_rewrite rules). That being the case, I don't see any reason to get rid of the tag, at least not yet.
SEO strikes me as a Meta Tag -- that is, seo does not provide any useful information about the question to me, and it fails both "Meta Tag" tests.
If the tag can’t work as the only tag on a question, it’s probably a meta-tag
seo is not adequate as the only tag on a question (at least not on Server Fault).
If the question is just about SEO then it's Off Topic (belongs on Webmasters).
If it's about something else - like rewrite rules, redirects, or virtual host configuration - then we need to know what they're really asking about.
If the tag commonly means different things to different people, it’s probably a meta-tag
I defy anyone on the entire internet to give me a universally accepted definition of "SEO" that's not just the three words "Search Engine Optimization".
Bottom line? I would shed no tears over this tag going away. There are 62 questions in it as of today - retag to your heart's content.