When Remodeling, Do We Need To Remove The Plaster And Wire Mesh Beneath Ceramic Tile?

We want to remodel our 1950′s yellow and sea foam green bathroom. Upon removing some ceramic wall tile, we found about an inch or so of plaster with wire mesh underneath. How do we remove the wire mesh? or can we leave it? If we leave it, the bottom part of the wall won’t be flush with the top (non tiled) wall. We aren’t planning on putting new tile in, just drywall and maybe some sort of wainscoting.