My friend had her kids in a private Christian school until just after they were in Pre-K and 1st grade. They moved out in the country and the husband decided that public school was good enough for him so it was good enough for his kids. The country school had nice size classes and the principal has been there for many years, as had most of the teachers and staff.
My friend did not like this idea and found fault with every thing that happened at the school. Her husband told her if she wanted the kids to go back to private school then she could get a part time job and help pay for it.
She wanted to go the homeschooling route and did a great deal of research, it is expensive to buy all the books and pay the testing center at the local college to administer the tests. She would NEVER be accused of being a type "A" personality and our group of friends worried that he would just be sitting at home all day and playing outside. We tried to be diplomatic, after all she's our friend and we didn't want to hurt her feelings or make her feel bad. We just focused on the cost, the time responsibilty, no tv during the day, she wouldn't have time for her regular naps every day, no music, it's not at all like Summer vacation, it's regular school, just in the home with her being the teacher. She found that she would get a particular module and have a limited amount of time to get him through it, then he had a limited time to get the test passed. After thinking on the idea for a while she decided to accept they were going to go to public school.
It is nearly 2/3 of the way through the school year and it seems rash to yank him out over one incident. If he has been having issues all year then she, and the father, or if he's not around then another family member, need to make an appointment and go tallk to the teacher. If the teacher isn't interested in addressing the issue then go to the principals office, and on up the chain of command until she is heard and the issues addressed.
I say she let him stay and research the idea of homeschooling and make an informed decision about it by Fall. I think the preparation, the deciding what program to buy, what the household rules will be, etc...are all issues you can help her think of.