The dog isn't a lost cause at all - it's just a baby, but you really need to supervise them both a lot, lot more. If the puppy is chewing a toy, he needs to be doing that somewhere where he's safe and away from your son - so a pen, crate or behind a baby gate so your son can't accidentally approach him and cause him to become defensive.
In your OP, you say there was no warning but in your second post, you admit you weren't watching and didn't see what happened, so you really can't say for sure. Warning signs in dogs can be incredibly subtle and hard to spot unless you have all your attention on what's happening - things like the dog turning its' head away, licking its' lips and making "whale eyes" are all signs that a dog is uncomfortable.
It then generally escalates to a growl, then a snap, and then a bite, but some dogs will skip stages depending on how they've been treated in the past. For example, a dog who has previously been told off for growling may go straight from lip licking to lunging and biting.
I agree with PP who said you need to get help from a qualified behaviourist going forward, but for now, keep the two of them apart unless you are right there with your attention completely focused on what they're both doing so you can intervene ASAP.