If you’re a teacher of 7 year olds and you can’t deal with some snot, then you need to find a new job, because 7 years are filled with it.
To me, it sounds like the school handled the situation very poorly. And sadly, this is not the first time or the last time that a school will do that.
One of the reasons teachers are under such microscopes these days is because there have been many cases reported of teachers mentally or physically abusing children. When my brother was in grade school, he had a teacher that regularly called him stupid and threatened to revoke privileges of his if he didn’t behave in a particular manner. (And my brother was not a problem child by any stretch of the imagination) Teachers, just like the rest of us, can easily lose sight of their actions and can handle situations poorly.
In my opinion, you should move your child to another school. It seems unlikely to me that a teacher / principal that reacted in this manner would ever be able to be objective in regards to your child again. The fact that they behaved the way they did, indicates to me that they will not be able to look past it in the future, and that they do not deserve a second chance. You’re talking about the well being of your child, and you need to do what’s best for him. Don’t feel compelled to give these people another chance.