Or perhaps they are a two income family up to their ears in debt and cannot give up one income...I don't pretend to know.
But the teacher could have had him removed from her class without the humiliation. That wasn't necessary.
If you can, put yourself in the shoes of a five year old kid (generally oblivious, anyway) and try to imagine what it would be like to be treated thus and banished, never to return.
If his misbehaviour is a result of an organic disorder, as I said, the treatment is obscene.