Oh, I'm so sorry to hear that the environment has been poisoned. I'm glad the other parent felt moved enough to report the incident to you. I would collect as many details as possible and submit an official complaint to the appropriate person --probably linking in the superintendent and your local trustee on the matter. It's a question of "tone from the top", in organizational psychology lingo, and this kind of abusive atmosphere needs to be rectified with a top-down zero tolerance directive.
I hesitate to go on, but this really upsets me viscerally. No child--especially a vulnerable young child-- should suffer emotional abuse at the hands of someone in a position of power over him. Given the sterilized facts you've presented, my sense is that you are fully justified in removing your son from that toxic setting. I think "bullying" has become a softened, almost meaningless term; this is abuse.
