I imagine sheer boredom and the prospect of the total lack of personal freedom could also play a role in that. In any event, this still makes the transfer of memory tricky, since you want to preserve work done over time without bound, but only selectively 'let through' memories to avoid this sort of change of personality over time.
I fully agree.
A possible solution would be to lengthen the time interval, at a guess you could give them a subjective week without worrying about too much personality change, making it more possible for them to successfully write down everything important.
I'm still very worried about the morality of it, as I see it the resetting amounts to mass-murder.
Toy model of an upload-based AI that doesn't seem to suffer too many of the usual flaws:
Find an ethical smart scientist (a Gandhi-Einstein), upload them, and then run them at ultra high speed, with the mission of taking over the world/bringing friendliness to it. Every hour of subjective time, they get reset to their initial specifications. They can pass any information to their resetted version (limiting the format of that info to a virtual book or library, rather than anything more complicated).