I'd say that it is possible.
Easy way (all structures are deleted each time you shrink):
1. Start the map for however long you want
2. Delete all region files
3. Change the <biome_spawn_rule name="radiated"> in rwgmixer.xml to a lower number.
4. Repeat
Harder way (keep all structures not in the shrinking rad zone):
1. Start the map for however long you want
2. Delete only the region files between current rad zone and where you want to shrink the rad zone.
3. Change the <biome_spawn_rule name="radiated"> in rwgmixer.xml to a lower number.
4. Repeat
Both ways players will keep what is on them...guns, ammo, supplies, etc. The Harder way they will be able to keep chests and buildings not in the shrinking rad zone. But, deleting the right regions would be time consuming, unless you can write some sort of script or something to do that for you.