A reset generated by a watchdog that correctly identifies crashed software can be a bit more than a strict software failure. Software can fail due to a hardware malfunction. An example of where a reset of this sort can be useful is on an embedded device where there are outputs from the circuit that are controlled by software (or by on board peripherals). It can sometimes be useful to wire the reset signal into the output driver circuits to ensusre that they go off to as safe of state as possible. Of course there is no guarentee that the output circuit will itself not fail in an unsafe way but that is a subject for another thread.
Mike Karas