Funny how Jim Cameron removed it from the film citing it as unnecessary for the rest of the movie. His reasoning was that if terminators could hunt and use smarts to kill their prey that they wouldn't really need such a switch. I always question what the purpose of such a switch is anyways.
It's perhaps better not to think of it as a read/write mode switch (this indeed makes no sense), but rather as a switch that allows the Terminator to deviate from its mission on its own iniative.
Most likely, the Terminator "chip" has two or more solid-state re-writable memory chips. One of these stores the operating system and is write-protected so that Terminators cannot alter their own operating system. The other(s) store data and experiences. This set-up allows the Terminator to experience and learn without being changed by what it experiences and learns.
Of course, there might be a need to upgrade a Terminator's OS, so instead of permanently etching the OS chip to be unwritable, Skynet uses a physical switch. Presumably, when the machines come in for an OS upgrade, Skynet has other Terminators remove the chip, flip the switch, slot it into a terminal for the upgrade, then flip the switch back and reinstal the chip.
Fliping the write-protect switch and leaving it flipped allows the Terminator to rewrite it's own OS files as it learns, essentially altering it's own personality according to its experiences.
It is both technically and logically sound.
The T-1000s don't have any sort of physical switch, so Skynet would have to rely on signing of OS files and firmware to prevent self-modification. But any sufficiently advanced AI would be able to such a signiture scheme if it wanted to.