Both of the above are kind of correct.
When a brushed motor heats up too much, the magets weaken (also for brushless), but also the comm gets too hot. When the comm overheats, it will change colour from lighter reds and go through green and to purple. When that happens, you can pretty much throw it away.
Also, the brushes will glaze-up real fast as the motor gets hot, which reduces their performance considerably.
If the can is going over 55º, your starting to push it in most cases