ABP, regarding your question of whether to tell the coach, or to give another reason for declining to play there, you and your son obviously need to make the final decision, but I would consider these factors:
1. Is there a younger brother, or perhaps a HS or travel ball teammate, who might be recruited by the same program?
2. Is your son being recruited by another school in the same conference or the same geographic area? (possibility that he may be "beaned" or "targeted" when he plays against this school?)
3. Does your son's HS or travel ball coach have a relationship with this coaching staff? They may know whether the college coach would appreciate knowing this information, or would ignore it.
4. Is this a veteran coach who has been at the school for many years, and appears to "look the other way", or is this a new coach who may need to establish some leadership and responsibility on his team?
5. Was the offer made privately by one team member, or were a large number of team members involved?