It is RIDICULOUS to ask your son to go back and do a lower grade when he has completed and, I assume, performed well at a higher grade. "Gaps" tend to be a nonissue for these kids. Any potential issues can easily be remedied by involved parenting and appropriate, differentiated teaching, which every child is entitled to (but, I know, doesn't always get).
One last thought, have you seen the Iowa Acceleration Scale? Might be something to look at and present if you think it will help and hasn't been done already.
That principal is failing not only your son, but his entire school, if he so easily looks past and turns his back on ensuring that ALL students are appropriately challenged.
