As with a number of things in the season finale, the information presented seems to contradict information given earlier. in the Smith episode Nightmare in Silver, The Doctor's mind is invaded by Cyberman nanotech, and has partially succumbed to the assimilation process. The Doctor says that he could, if he wished, trigger a regeneration, which would burn away the cyber-tech, but he didn't want to do that.
(There is also the fact that at the time, The Doctor believed he was at the end of his regeneration cycle, and as such, believed that he could NOT regenerate, so we can assume that his threat was an empty / a clever lie.
So, if the act of regeneration would destroy any of the cyber-tech in a Time Lord's body, why would it not destroy the tech within the Cyber-Master?
We can pretty quickly assume that The Master has already thought of that, and has Done Something to prevent it. Perhaps the tech in this version is designed to survive the process, or perhaps he's made changes to the process to assume the tech is not a threat.
If one were in a "This can't happen, and here's why" mindset, one could come up with any number of things that could be seen as "proof" that the story is flawed, almost all of which could be answered at least Superficially with "The Master thought of that".
For example, since (most) Time Lords can only regenerate twelve times, his promise of endlessly repairing and regenerating warriors isn't correct. Again, since he's see the details of how regeneration was integrated into his race, he could have removed the limit for these warriors.
We can debate it till December...and probably will.