That shouldn't be necessary -- both my RPIs are powered from the hub they control without any issues so far. (Although that might depend on the hub...) I've never heard of anyone having to cut wires for this sort of thing to work.
Hm, interesting! I just feel a bit uneasy about feeding the routers "own" power back into it.
Feels like it might work fine until there is a spike in the grid and then: poof your hub/pi is toast, and if you're unlucky your house burns down with it...
Do you know what the USB spec. says about this?
Edit: Please see this quote from a moderator on the raspberry forum:
If you leave the red wire intact, (and are thus "back-feeding" the PI, as its commonly called) you are in fact bypassing the PI's F3 polyfuse.
There is one single case I am aware of where this caused trouble when that user also used a badly designed power supply to feed the hub. The power supply wasn't properly regulated, and unloaded it outputted more than six volt! When he plugged it in it triggered the over-voltage protection diode of the PI (which triggers at about six volt) the resulting short circuit current though the diode, unimpeded by any fuse, overheated the diode so much that it melted a hole in the enclosure of his PI!
Its thus much better to "cut the red wire", and not to back-feed the PI!