You know your kid best. With that caveat, for my just turned 5 yo kindergartener, getting him out of the play based stuff and into a more rigorous environment (relatively speaking of course, its still kindergarten) was the best thing that could have happened to him. He found the play based learning too slow and tended to cause trouble just so that something interesting would happen. But of course, that's my kid; yours might be entirely different.
Why the opposition to a grade skip? I'll admit I'm pretty biased in favor of them, but the evidence in favor of them is surprisingly strong. I'm about to push for a grade skip of my DS5 (skipping first grade). I'd much rather he be in a class where the teacher doesn't have to have a separate lesson for him to keep him learning but instead he could learn with the class.
