Erase (Analysis) doesn't work in a Versioned environment, unfortunately, due to the constraint on processes that create new data. However, if you export your data to a File Geodatbase, you are free of the enterprise geodatabase limitations. You can then do all the processing of the data, then Append the results back into the Version.
If you don't have the Advanced license required to have Erase available, there are several workarounds:
1. There's Python - see the script Darren Wiens posted.
2. If you have XToolsPro (third-party software add-on), there is an Erase Features function.
3. You can run a Union (Analysis) which is available at all license levels, and then go into the attribute table and do a selection to essentially recreate the results of an Erase.
The output feature class will contain a FID_<name> attribute for each of the input feature classes. For example, if one of the input feature classes is named Soils, there will be a FID_Soils attribute on the output feature class. FID_<name> values will be -1 for any input feature (or any part of an input feature) that does not intersect another input feature. Attribute values for the other feature classes in the union where no intersection is detected will not be transferred to the output feature in this case.
ArcGIS Help 10.1 - Union (Analysis)
Chris Donohue, GISP