What you can try is following:
Go to an elevated command prompt. Elevated Command Prompt
Type DISKPART and hit ENTER key.
Now you will enter some commands for DISKPART. List disk
That will show a list of disks on your system.
Look at that list and decide which one is your usb stick.
Let's assume that the USB stick is number 1. Select Disk 1
This will select disk 1.
Now to make sure you didn't goof. Detail Disk
This additional info should help you be sure of your choice. CLEAN ALL
This is going to write zeroes to each and every byte of the USB stick.
Wait, wait, wait and wait for this command to finish.
Do not proceed until you see the Diskpart prompt again.
After the Diskpart prompt appears again, then Exit
This will exit you from DiskPart.
this will exit you from the command shell and return you to the Win 7 screen.
Now see if you can use that flash drive.