What did you use to jailbreak (if you have)? When did this problem start (what happened)? No, setting permissions should not affect your wifi capabilities.
it may just be a setting, or the router itself. Have you restarted the router? When my router plays up, it just drops the conncection, and my iPhone has the wifi connected symobol, yet it pops up with the same window saying it is not connected!
so try restart your modem, and play round with that, otherwise you should restore to see if it was a software problem.
Are you able to connect to the wifi with another device? laptop etc?