There's a line between intentional sabotage - aka telling them to delete the working filesystem - and induced incompetence.
I worked for a small company many years ago (as in about 20 years ago, during college). First there were pay cuts, then paychecks started to be late, and eventually creditors started showing up... So basically I knew I was screwed, but I figured if I quit, there was no chance at unemployment. Let's just say anything done in that last month wasn't exactly quick or robust. The firmware written in those last days pretty much skipped any error checking, met only the barest of requirements, had total crap for comments, etc. Plus, half the time I was sitting there, the programmer/debugger was hooked to one of my projects rather than theirs. As long as there was code on the screen and I was cursing at some board, nobody still there could tell if I was working on their stuff or mine.
Showed up one day to a locked door and the place cleaned out. My old boss - the owner - called me one day when he tried to sell the technology to another company. Couldn't make it work for the demo and wanted my help. Since I hadn't seen more than 25% of my pay in the last three months, I offered to help for some additional compensation up front. Went in, screwed around for two or three hours, and then declared that something must have gotten fried or jostled when they hastily packed up the place and fled in the night. Basically, unfixable, sorry, and if you want me to repair the hardware it's going to cost a lot more.
The real answer is that if you want code to run, you should probably burn it onto the EEPROMs before putting them in the product. But hey, with little financial incentives, there's virtually no end to the problems I can't solve.