Is there a way to reset the Canon MP258 to factory settings to resolve the E05 error?

While there isn't a standard factory reset procedure that always fixes E05, you can try a service mode reset. To do this, hold the Stop/Reset button and power on the printer while still holding the Stop/Reset button. After a few seconds, release the power button while continuing to hold Stop/Reset. Then release Stop/Reset. This often requires a specific service mode entry sequence; consult online guides for your model.