1. There's no point in optimizing memory usage by hunting iterators. If the collection overhead is becoming visible, then you need an array, not a reset method.
2. You cannot easily add "reset()" to all iterators now, since it will be a breaking change.
3. Having reset() on all iterators 25 years ago would reduce the number of use cases for it, if this method had to be reliably supported.
3. Throwing UnsupportedOperationException in default method to maintain compatibility of libraries with existing user code would require the new client code using that method to catch the exception and handle it, which ruins the whole idea of optimization (you will get more overhead on that).
I you are concerned about performance, you have to design your code with respect to it. Building your application the same way as if performance wasn't a big problem, using the same libraries and APIs is just a bad idea that won't be salvaged by such "optimizations".