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Is the Performance History stored? Can it be reset? Is it possible to lose it erroneously?

Performance History Each test result including your responses to questions are stored and can be seen easily. However, Please try the trial version to see if the performance tracking matches your expectations.

Clearing History When you first open a question bank, you are required to specify an empty folder (called "Work Folder") to store all your data. You can clear all your history just by deleting all the files from there.

You can also remove individual test attempts from ETS Viewer itself. (Right click on a test attempt and delete). But this will not affect the global average score that has already been computed.

Backing Up History You can easily take the back just by copying the workfolder. You can even move your history to another machine by copying the same work folder. See this image to see and change the location of the work folder:
How to see and change work folder for the question bank

Except disk failure and manual deletion of work folder, there is no possiblity of the data ever getting lost. We haven't received a single complaint regarding loss of data. In fact, the design of the data storage is such that even a hard reboot will not cause the data to be lost. Cosmetic preferences (such as window size and location) are stored using Java Preferences API and on windows platform it usually goes to windows registry. This might be lost in case of registry corruption.