Termination of studies is very final because it is the ultimate last resort, when all other attempts to support the student have failed. However, there are appeal processes before you get to this stage that are designed to catch students like your son and give them another chance. That's exactly what has happened here, so arguably, the processes are working as they should.
You are, of course, absolutely right that some students who are struggling don't ask for help. This is a real problem. However, what are universities actually supposed to do if the student repeatedly fails to engage with attempts to contact them? They simply don't have the resource to go banging on the doors of students who never respond in the hope that they will find a time when the student is at home and willing to open the door and engage with them. It isn't a boarding school - these are young adults, so while the university does absolutely a duty of care, they are not in a parental role and can't be totally responsible for students' wellbeing. Some of that sits with the students themselves.
I appreciate that it must have been a shock to realise that things had got so serious, and tbh, your reaction as a parent is not unusual. From my previous experience of working at a university, I'm well aware that students who have ignored warnings about attendance or engagement are often somewhat selective in what they choose to share with their parents. So from the parents' perspective, it seems like it has come completely out of the blue, whereas from the university's perspective, it has been building slowly for a very long time.
Sometimes, because of poor mental health or overwhelm or whatever, students ignore numerous soft "early warnings" and a harsh sounding letter threatening termination really is the only thing that makes them wake up to the reality of the situation that they're in. They actually need that tough kick up the backside to help them realise that they need to take action. If they do take action at this point, there is usually an appeals process that will give them another chance, and through that process, the university (and quite often parents) will be made aware that the student needs more support, so this kind of thing can be a catalyst to getting help that the earlier softer communications don't quite manage to achieve. Tough love, if you like.
Maybe try to change your perspective on the matter if you can, and see that actually, this whole process might have been a blessing in disguise for your son. Hopefully, he will now access the support that he needs. Best of luck to him.