Sorry to hear. This is a tough one. Does your son like the school and is he making progress towards his degree? Remember, that's the goal here. Transferring to another school can be difficult. Loss of credits, not on the coaches proffered list and another year older with less experience.
Does he have other coaches interested? Is there a good JUCO he can get in to?
I would suggest you continue to reach out here on this site and continue to give more information. Also, I would encourage you tell your son to continue to work hard, don't take the coaches comments personal. Stay focused on baseball. He might be able to get past this, but if not, he will be in good baseball shape for the next opportunity.