Well, the reset switch usually causes the bootloader to reformat the volatile partition of the flash.

But there's nothing to stop an attacker from rewriting the "write protected" areas like e.g. a firmware update does.

Consider that many routers these days come with NAS or MediaServer functionality... and thus are a valid target for hackers.

Furthermore, they are often directly connected to the Internet, and there have been numerous remote-root exploits for cheap chinese knock-offs as well as for highly praised manufacturers like AVM.