If the longest road is interrupted and therefore reduced, does the player have to surrender the longest road card?
Yes and Yes. In the rules it states that if the longest road is split, then you re-evaluate who has the longest road. If no-one qualifies (or it is now a tie) it is returned to the bank.

Building a settlement to split someone's longest road is a key tactic in Settlers, which can be prevented by the player building extra roads and/or settlements to protect the vulnerable spots, but that obviously slows down their road building.