At least last I recall, the "guideline" was that if you could touch the device for a few seconds, it was somewhere below 60° C / 140° F, which was then generally well below the "safe limit" for transistors or early ICs.
If you think you've got a thermal problem with the device, with standard caveats around voiding warranties and possibility of damage to the device, the first thing I'd try would be a heat sink on the SoC. Not completely sure if this is the correct device, but they look like bare chips in the photo at Xiaomi WiFi Router 3G - #29 by dror
That, of course, assumes you've got good airflow around the device, have blown out or vacuumed any dust you can from inside the case, and don't have it sitting on top of your 500 W stereo system, or the like 
How much power does it draw from the mains or from its power supply? There's no more than 2 W of RF output (30 dBm = 1 W) from a dual-band radio, and it typically doesn't run at anywhere near full duty cycle. Many devices already only put out 1/2 or 1/4 W at "max" output (27 dBm and 24 dBm, respectively). I'd be surprised if reducing the RF output dramatically reduced the total power consumption.
What, if anything, do you have running on it other than the wireless, routing, DNS, and DHCP functionality? Are you running a VPN on it?
(Unfortunately, the datasheet I have for the MT7612 gives the thermal characteristics as "TBD")