I understand your mixed feelings, but he's only 8, and expecting him to do work far below his level-- and be happy about it-- is asking too much. I think you need to step up your advocacy.
Can he test out of the math the other kids are doing, and then do math at his level, either through workbooks you send in or an online class? You could ask him to take the end-of-year benchmark or whatever appropriate test there is, just so they'll have it for their records. As for online classes, he could do CTY, ALEKS, Singapore Math workbooks, etc. You could also get the Life of Fred books.
Is math the only area where he's acting up? If there are other areas, I would look at trying to change those as well.
If the teacher won't differentiate appropriately, or says she can't, I would ask for a meeting with the school and try to get a gifted IEP. Ask for a plan that will detail how he will grow a full year academically.
My son was starting to get really frustrated by 3rd grade, even though he had been in a highly gifted classroom since 1st grade. In 4th, he was depressed and never wanted to go to school. If I could redo those early years, I would pay more attention to what he told me (I thought every kid claimed they never learned anything in school!) and act faster to get a better academic fit.
