I've heard this is a big thing in certain communities. I'm not particularly fond of this practice. My son's passion is music, but I wouldn't have held him back for sports if that were his thing. It's just not a good enough reason for me. I believe in holding a child back for cognitive or physical reasons (like being very small for their age), or for plain ol' lack of maturity. Come to think of it, my son could have used an extra year to work on that dang handwriting of his!
Crimson, I'm reading your original post again. Your son sounds quite smart and doing very well academically. Do you think he might be bored with school because it's too easy for him?