Dave,
As I have read, but never heard, anything is possible.
Some say coaches lie, never trust them. I don't think that I would send my son to play somewhere where I thought the coach had a reputation for lessening scholarships. There has to be trust between player and coach, on and off the field. My son's amount is good for as long as he remains at school and remains eligible. Yes he has to earn a starting spot, but that has nothing to do with his scholarship. And yes it is renewable, only because that is what has to be done. I don't know of anyone who has had a reduction in scholarship. Sometimes we hear, "oh I know of someone this happened to", but really you have not heard the whole story.
On the other hand, if the amount is low, I would think that a question should be raised if the player has proven himself invaluable. I certainly would consider it and would tell my son to discuss it with the coach.
Coaches have a knack of finding money if they really need to.
Then there is always the option to transfer for a better offer or more playing time. Happens all of the time.