everything you've said is pretty much standard for private school. It's a private service. they take a deposit so people don't mess them around. assessing at 3-4 isn't everyone's cup of tea - there are plenty of less selective private schools that don't do it. If you think it is such a barbaric idea then why apply for one that does? you come across as a bit hysterical and very hard work.
I kind of agree with holepunchkid. We all want the very best for our children but I think you have written this post whilst you are feeling emotional about it all - it reads a little like sour grapes as your son did not get a place.
If there are only four places in reception then why would they chose you son over all the other boys who did perform on the day?
It's the world of competitive academic schools I'm afraid - they can afford to pick and choose and they will.
I personally don't think that assessments at this age are right. Whilst allowances are made for the children who are younger in the year you will find that there are greater numbers of children born in the autumn than summer terms. I made the conscious decision to only look at schools that didn't assess so early on. I am happy for assessment at 11+ but before that forget it.
He will be picking up on your stress too and it could be coming "a thing". It might be difficult to accept but maybe he is just not right for this school at this stage. He won't be doomed for failure for the rest of his life. Find a school that feeds HIS needs right now, not one with an impressive list of leavers destinations. Nurture him, give him a happy start to school life, give him a love of learning and he will be fine.