Yeah when Luther and others revolted against the authority of the Catholic church, gratefully from its very beginning, Islam rejected such forms of religious authority, since the Qur'an and the Prophet of God are the only authority. This allowed for Islamic jurisprudence concepts like "the fatwa changes with the change of time and place", while preserving Islamic fundamentals that don't leave Islam "loose", distorted or without characteristic features.
There is a balance can be achieved in Islam, the balance between preserving definite Islamic concepts and on the other hand leaving a huge room for its followers to work their minds and derive different laws (that are subjected to revision) under the general less specified religious text. Which makes Islam a flexible and dynamic religion that enables its followers to interact with the different circumstances and realities. In return, this makes Islam a way of life and not just a set of cold creeds and rituals that have minimal influence on the various life arenas.
So, I don't think that Islam needs a similar "reformation" as it happened within Christianity.
You do have the so called "Qur'anyoon", and calling them "westernized" is very appropriate.
There can be a widespread break from the fundamentals of Islam but this only can be an indication of weak faith.