Thank you again for the feedback. This is a new venture for us, and I appreciate all of the perspectives and opinions.
The primary focus of his "curriculum" is reading and singing corresponding songs to the books, as well as learning sight words, etc. I would like to stress that this curriculum is fun and that these 2 & 3 year olds are not being made to sit in chairs and work on worksheets. Unlike most daycares, this is a school in the sense that every "toy" is an educational one and they have educational "goals" they try to meet each week. (Retention/Comprehension of the books, recognizing words, etc)
The homework, for the 4-5 year olds, is designed to be "fun" with focus on sentence building, CVC words, etc. Although my little guy finds this "homework" fun because it's new material...a challenge.
After reading some of your replies, I sought out additional clarification from the teachers as I do agree with most of you - it should be a happy experience not a day filled with educational structure. At this age, they really are focusing on the children being in a socially driven environment with pair playing and circle time.
This thread garnered some deep discussions between my husband and I. When a child care provider says "it is normal for your child to cry for hours, even all day" you have to wonder how much of a good time that could possibly be for the children who are not crying.
Ultimately, an environment that is so extremely stressful cannot positively impact anyone, gifted or not.
We have noticed, in less than 2 short weeks that our little guy is regressing some...he has sought out his old baby books, is less interested in things/toys he was before. What we aren't sure of yet is where it leads. We are willing to give it time so long as he continues to grow in other ways.
The comments regarding the pressure we felt to "socialize" him helped clarify a few things for us; specifically, that it is not entirely a necessary step at this age. He is not kept inside away from the world and therefore I do believe he can adapt to social norms without the influence of a day school or child care center.