Well in this case you have all of the fumes and none of the reality on your side. The very nature of the conversation should have clued in any attentive teacher (who's not just a grease spot in a gummint sinecure).
No, not necessarily. You make a large assumption there, which isn't warranted by what we know about the situation. And even if it did, the teacher was within his rights, and the kid had no call to become vulgar and abusive. He's obviously a snot-nosed brat who thinks the world revolves around him. And given the circumstances, you can be sure that this wasn't the first time he's had this kind of run-in with the administration.
You may not like the public schools, but for those who are obliged to attend them there's only one thing worse than an administration who would do this kind of thing to one of its students, and that's an administration who wouldn't do this kind of thing to one of its students.