Wow! I'm sorry that this has happened to you. That teacher was way out of line saying that your son isn't that bright.
I am a math teacher (gifted high school), and I would say that the teacher is partly right about the math. I don't know what kinds of mistakes your DS is making, but it's VERY important to be able to communicate mathematically. This includes showing (via some steps) or explaining how one arrives at an answer. Many people think that math is just about arriving at an answer, but math is a process that combines logic with verbal skills, too. Proving theorems, for instance, requires effective communication. I'm not saying that proof writing is the focus here; I'm just trying to illustrate a point. Even an engineer must be able to justify/explain why his/her bridge design is better than another. A statistician must be able to interpret a p-value. This involves mathematical communication.
In light of this, I still think the teacher was way out of line and should be trying to encourage (not discourage) your son. It's the teacher's responsibility to convey to your son WHY he needs to show more work or use correct units. An effective teacher can do this without making a student feel as though he's being treated unfairly or that he's not smart.
