It seems pretty clear from the book that they deliberately only erased the memory of the altercation and not the Death Eaters' other memories. Consider the following dialogue from chapter Nine:
"What are we going to do with them?" Ron whispered to Harry through the dark; then, even more quietly, "Kill them? They’d kill us. They had a good go just now."
Hermione shuddered and took a step backward. Harry shook his head. "We just need to wipe their memories," said Harry. "It’s better like that, it’ll throw them off the scent. If we killed them it’d be obvious we were here."
"You’re the boss," said Ron, sounding profoundly relieved. "But I’ve never down a Memory Charm."
"Nor have I," said Hermione, "but I know the theory."
She took a deep, calming breath, then pointed her wand at Dolohov’s forehead and said, "Obliviate."
At once, Dolohov’s eyes became unfocused and dreamy.
"Brilliant!" said Harry, clapping her on the back. "Take care of the other one and the waitress while Ron and I clear up."
"Clear up?" said Ron, looking around at the partly destroyed café. "Why?"
"Don’t you think they might wonder what’s happened if they wake up and find themselves in a place that looks like it’s just been bombed?"
"Oh right, yeah..."
As we can see from this exchange, what they wanted to do was to make sure that no one would realize that anything had occurred, and most importantly that no one would realize that they had been there. They chose not to kill the Death Eaters for this reason — two dead Death Eaters in a café is awfully suspicious and would immediately inform Voldemort's side that there had been some kind of run-in with opposing forces.
Entirely wiping their memories (to the point that they would be unable to perform magic) would be just as bad of an option. If two Death Eaters are discovered totally out of their minds that also immediately points to an altercation with the opposition. Therefore, all they did was remove the memories of the incident itself so that the Death Eaters could go on their merry way without anyone's suspicions being raised.
In any case, the plan didn't work so well, as we see later (same chapter) that Voldemort found out that the Death Eaters had been with Harry Potter:
"More, Rowle, or shall we end it and feed you to Nagini? Lord Voldemort is not sure that he will forgive this time.... You called me back for this, to tell me that Harry Potter has escaped again? Draco, give Rowle another taste of our displeasure.... Do it, or feel my wrath yourself!"