Sequel resets are a regular and often necessary move, because a character that starts off at full power would have no room to grow and little to no challenge to overcome, which is fundamental to game design and play. The characters need to lose the skills, powers, etc. that they had gained in the previous game, so that the players can build them up in the new one. The player has to start at Level 1 and make his way up regardless of what happened in the last game. Otherwise, the progression would be too easy and the game would not be interesting.