Does repeated flashing cause degradation NXT
LEGO Mindstorms all use flash storage which does have a limited number of write cycles, so the answer is technically yes in some capacity, but it's probably not something you need to worry about.

A LEGO Mindstorms NXT 2.0 uses a Atmel AT91SAM7S256 microcontroller. This board has 256 KB flash memory, which is roughly the size of the latest firmware image.

According to the datasheet for this board, it should be good for 10,000 write cycles.


  
  256 Kbytes of Internal High-speed Flash, Organized in 1024 Pages of 256 Bytes
  
  
  Single Cycle Access at Up to 30 MHz in Worst Case Conditions
  Prefetch Buffer Optimizing Thumb Instruction Execution at Maximum Speed
  Page Programming Time: 4 ms, Including Page Auto-erase, Full Erase Time: 10 ms
  10,000 Write Cycles, 10-year Data Retention Capability, Sector Lock Capabilities, Flash Security Bit
  Fast Flash Programming Interface for High Volume Production
  
  


10,000 is actually quite a bit, and would take a very long time to reach intentionally, even if you automated it to run 24/7.

I'm not sure how fast you physically can flash the firmware, but if you did it once every 10 minutes 24/7, it would take you almost 70 days to reach that limit.

If you flashed it a still-unrealistic 10 times per-day, it would take you 1000 days to reach that limit.

And of-course, if you did it once per-day, it would take you over 27 years.

In practice, I think it's much more likely some other hardware component will fail first.