I think the school is unfair, what they should have say is that he might struggle to get an A, not that he would scrap a D>
However, going by DD and her friends' experience (small sample, but quite representative), it is a fact that those who got an A in A levels have all failed to get an A at AS levels, and that's with them going to 3 different institutions.
DD got A* at Maths and FM and managed to to score all above 90, but her best friend, who managed to get 5As at GCSEs included Maths did so by working extra hard, and even continuing to do so at college, got a B at AS.
She is still hoping to be predicted an A and to be able to go to study Engineering, and is likely to get a place even if she does end up with a B, so I think the school is being very unfair. Was was your son expected grade? There's a difference if he struggled through the year but somehow managed to just scrap an A than if he was A* level but lost out by a couple of point on the day.
I would have a talk with the school again. It's amazing how some say no before start of the year and suddenly (as a number of students drop off) become more flexible afterwards. If it's still a no and your DS is determined to study Engineering, I would change school.