pitcherparent - You sure bit into a big-time topic for one of your early posts!
Many will be interested in this discussion I think.
There are many thoughts regarding your question(s) and I'm sure you will hear a very wide breadth of opinions on this. Our son was fortunate enough to play for his longtime top choice in college, so I think I can guess a lot of what you and your son are thinking/feeling.
Anyways, here are some thoughts:
* Is this a fully funded program? That is, are they using the full 11.7 scholarships across the team...not all D1s are fully funded. Some, including the University of Oregon (in their first year back as a D1 program), are funded at a lower level.
* For a 2010, I would find it hard to believe that the school is nearly finished recruiting that class. That certainly wouldn't be true for our local D1s. They're just beginning to make offers and won't finish it up for over a year from now. Since I have no idea which school you're talking about...I probably shouldn't guess this, but I think they're bluffing.
* I don't think computing an "average" scholarship offer based on 11.7/team is of much use. I think the median number is more useful (that is, what is the guy in the middle of the team getting). My guess (and its only a guess) is that when you throw in the 10-15 kids getting nothing on a 35-man roster that 25% would be about the median (or middle guy). For an LHP that is expected to contribute early in his college career, the median would probably be higher.
* 25%, as you know is the minimum offer above 0%. That means something. Either they believe they can get your son for less because they know he wants to go there or they believe you can easily afford the rest (and they should've made some reference to this). Or...they don't (at this time) consider him one of their top recruits (given, as you point out that he is an LHP...very valuable to any program). There are many college baseball players who get 0% and are superstars, so the 25% alone should not stop you. But if you believe your son is one of the top recruits, they should pay more.
* On the other hand, if THIS is the THE SCHOOL that he would attend if baseball were not a factor, then I personally would be happy to take any amount. Thats for you and your family alone to figure out.
* Have you asked them, "What is your evaluation of my son?" Or has your son asked them the same? How about, "When do you see my son contributing?" And if their projection of him is very high, I wouldn't be totally afraid of asking, "Is there a reason why the offer is 25%?"
* Don't say "no" because your feelings are hurt, unless they're going to stay hurt for a while. This will not be the last time your feelings will be hurt on this road to baseball beyond HS. If, on the other hand, this is painful and it won't go away...and I'm talking about your son's feelings much more than yours...then its time to think twice. If its a non-issue to him and a non-issue financially to you and you're convinced they want him...then it might be time to strongly consider accepting their offer.
Bottom line, only you and your family can answer many of these thoughts/questions. If you decide to accept it, come on back and ask the next question, "What are the +'s and -'s of playing for your 'dream school'?" The answer to that is not so simple either.
P.S. It took me too long to write my response and I see others, in the meantime, covered some of the same thoughts. Good luck!