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In WM2003SE, you also have the Build-In Storage. Anything that you put into that folder will not be deleted when you hard reset, because the OS will not touch it, just like the OS won't go ahead and format your storage card when hard resetting.
In WM5, the OS has control over all the ROM area when you put in your data. Hard reset would instruct the OS to also clear out all the data that you put in.
If the system were to work like you said, ie. hard reset but user data remains, think about what you have to do if you want to sell your device to someone else. You'd have to manually delete everything, and even then there might still be database files left around that you cannot see normally.
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