I think whenever we as parents do something that is outside the norm, we question ourselves. And that is perfectly normal. I doubt there are easy answers to the question of whether we are doing too much or not enough, but the fact that you are asking the question is the most important, because that means you care t monitor the situation.
As for monitoring academic readiness, that is somewhat easier as you can see by ongoing test scores and the work coming home if the level is closer to appropriate. If the school does testing like NWEA MAP testing, which goes above level, you can see where your kiddo falls among kids in higher grades.
Social readiness is sometimes a leap of faith, because you don't know until you do it. but if the school has come up with this plan, it's a good sign that they think he's ready.
When our kiddo started skipping/changing schools, we made a point to make playdates with the friends from the earlier grades. DS8's best friends are agemates (one in a grade below and one who is also a grade skipper). I recommend keeping in touch with old friends, though he will make new ones too. With luck, your DS will get along with some of the kids in 3rd after the break, and going to 4th won't be an issue because he'll know the kids already.
As for what to tell other parents, we found that the ones who knew our kiddo were very supportive, and the ones who didn't really know him were satisfied with "The school decided it was best for him since he already completed the requirements in the lower grade." That stopped the questions, anyway. We also added that we felt lucky that our DS still got to see his other friends in afterschool activities like scouts, YMCA camp, etc.
Good luck!
