I tried to run $ bundle exec rake db:reset and found the following on console
Couldn\'t drop db/development.sqlite3 : #
When you do db:reset, it's running db:drop and db:setup in sequence. Your error message indicates that db/development.sqlite couldn't be deleted.
If you're on Windows, maybe you need to stop your Rails server and console. Otherwise, figure out what's preventing the file from being deleted. It could be permission problem. A reboot may solve the problem too.