"I will pull a happy life out of it all but it’s a bit unnecessary and I can’t quite see how to get there or where we are going."
The first step, I think, is to realise that you didn't miss anything. Your post here "I think we just want to do our own thing. I’m tired of squeezing my beautiful son into shapes that don’t help him and don’t make him happy, and tired of having to be “grateful” for less than minimum and really tired of having mine and his life highjacked in this way." says it all. You've been taught to accept that your DS is such a problem that even having him in their room is a privilege. Awful and absolutely not true.
For whatever reason, and it really doesn't matter what it is, they haven't seen DS. They haven't made the effort to meet his needs. They've decided to make him the problem instead of looking at what it is that is causing this fine, amazing, happy young man turn into a distressed, angry young man.
I would email them and tell them what you want for that graceful exit. Do you want them to send him a goodbye card from his classmates in the post? Do you want them to send him a certificate of achievement for his time at college? Do you want them to arrange a 'goodbye DS' session on a particular date (or would that cause more confusion and upset?).
For DD1, at college 1 it all went south and she couldn't bear the thought of going back in. So we left it. I think they emailed us a certificate.
College 2 sent goodbye cards, a certificate, and offered for her to go in to collect some stuff. She declined.
College 3....she was never going to set foot in that place again. They tried to arrange goodbye sessions. They tried to arrange Zoom sessions with her. They tried to set work she could do. No.thank.you.I'm.done.
You've got this. This is the start, not the end. It's time that DS gets what he needs.