I suppose that the answer depends on what, exactly, is within the Church’s power with respect to indulgencies and purgatory. When the Pope and the bishops of the Church are given power to bind and loose, to forgive and retain sins, does this include the power to reduce time to be spent in purgatory? If not, then Luther’s question is meaningless. If yes, then Luther’s question is a quite good one.
BTW, there is little in Luther’s 95 Theses that modern day Catholics should disagree with. Luther was attacking abuses of the system. I would encourage Catholics to read the Theses for themselves to see what is actually said there. It was later on his his ministry that Luther began to seriously depart from the teachings of the Catholic Church.