It may be that he doesn't want to leave either his teacher or some of the other children in the class. If this turns out to be the case, would it be possible for him to have homeroom, lunch, or PE with his current class? Leaving him with his current grade for PE would probably make sense anyway, unless he is also precocious physically.
I agree with some of the other comments here that it really seems to make sense to do the grade skip, and the challenge at this point is to find ways to bring him on board with this idea.
