I am just curious, and feel free to not answer if you prefer, but why is your DH against pulling him out?
I think your plan to take him out for the summer is solid. There is no reason to put him in this environment if he is not happy there. And I think your concerns about how it could effect his self-esteem are very valid. You definitely don't want him to start thinking there is something wrong with HIM just because the classroom environment is not right. I would definitely say that this happened to my DS to a degree, although he is doing MUCH better now that he is a bit older!