I guess it depends on how badly you want the tree. It is not outside the realm of possible that the tree could restore itself. On the other hand, it will need staking, watering during dry spells, and lots of TLC.

To keep this from happening, orchardists around here put a collar of pea stone around the base of their trees about a foot in dia. and 3-4 inches deep.

That is the work of pine voles - the subterranian monsters of mousehood. Pea stone won't really prevent this animal from doing this and baiting or trapping must be done in fall to kill them. I'm told this is the only time they come above ground to feed and I know from trapping them that it is a time they come up. I believe pea stone is to discourage meadow voles as pine voles work well below a few inches deep as you've found out.

Hard to say if it's worth trying to save. Partially depends on how much room you have. You can wait until spring to see if there is enough root to generate reasonable vigor- if so it may eventually recover, but probably not as well as a new tree. Remove the flowers and cut back spur wood if you intend to give it a chance.