"rootfs" == "root file system".
You will need to flash the appropriate partition images to the device, either from an SSH-enabled diags mode or via a serial port.
A number of people have done it e.g. to get back to the original 5.4.0 firmware for the PW2 (original 2GB model). Reason being, that firmware was a lot more friendly to the Collections Manager kindlet.
http://ixtab.tk/kindle-touch-images/PW2/README.txt