Bear in mind that the school will possibly tend toward the solution that causes the least trouble for them.
If your DS is getting the right level of input with a particular group, I personally don't see why that should change. Schools are there to provide an appropriate level of education for the child, not to keep children in groups defined by their age.
The school could teach him appropriate material on a one-to-one basis with his age peers, or they could allow your DS to have a more socially rewarding experience by teaching him with other children. The extra bonus of this is that it will use fewer resources too. it seems a no-brainer to me, but schools get hung up on keeping ages together. Never mind that some children will be closer in age to the year above than they are to children in their own class, for schools it's all about September 1st to August 31st.
Differentiation can be done, but it's hard work for the teacher with a very able pupil because they should be doing one lesson with extension activities for most of the class, and if the child is truly gifted then pretty much a separate lesson for them. For every lesson, every day.
I am of the belief that it is good for children to work with children of a similar ability level. I know from my experience that being with children who are less able (albeit the same age) can lead to complacency and under-achievement. Think of who you choose as friends as an adult. Is it people who are the same age as you, or people who you get along with because they have a similar outlook on life?