Hm. Thinking about it, the term "multiverse" probably would've been more appropriate to use than "universe," but "universe" is a more generally recognized term -- "multiverse" is a little too Marvel Comics.
So to answer your question, yeah, They wipe out every damn thing and start all over.....
But if the idea is that They wipe out entire universes because the inhabitants aren't "right" enough for Them...doesn't that imply that the inhabitants of all the universes turn out the same way as one another? No offense, but I can't help finding that a bit hard to swallow in light of what we already know about parallel universes. Being all independant of each other, they could never all reach the same conclusion.