I've read most of this, so I have very little that I feel I can contribute without repeating other comments. But here's what I've got.
I agree - the child should have been removed from the classroom, if he was a disturbance. But I don't agree with how it was done. I find it disgusting that a teacher (especially a private school teacher, not even a mainstream public school teacher) thought it was acceptable to bring a 5 year old child, with a mental disorder, to the front of the room, and listen while 16 other children said why they didn't like him, and then watch as they voted him out. This is the real world, not a fucked-up version of Survivor or American Idol.
Most 5 year olds I know of would have forgotten about it within a few hours, yes.
However, I spent most of my summers in middle school and just before high school volunteering at a school for the mentally and physically handicapped. One of the students that I dealt with on a daily basis was a young child with autism. Autistic children DO NOT respond to things like a "normal" child does. Things like acceptance and rejection, especially to a high-level autistic, are so unbelievably out of proportion to what you would normally expect. So yes, while a "normal" child would most likely forget about it or shrug it off after a while, an autistic child won't. That rejection will stick with them for quite some time, and it will cause emotional scarring.
Just my .02 though.
EDIT: Let me just add here that I partially blame the mother, for not having him in a special school. Also, from what I've read of the articles so far, it doesn't look like the mother is suing for money, just the teacher's dismissal.