The rules of the school no doubt forbid physical violence and expect children to use a process set up by the system to defend themselves against bullying / being wronged. That system failed and because you rightfully saw your son's right to self defense more important than following the rules, you encouraged him to defend himself outsides the confines of the system and its rules.
Later both you and your son were bullied / wronged by the principal. The rules of the state you live in ("laws") no doubt forbid physical violence / being wronged. That system failed...
The principal is in a position of power which cannot be held accountable within the confines of the system. Such positions are ripe for abuse and in fact attract people who want to abuse power.
As a society, we should design rule systems in such a way that each position can be held accountable.
Call the local media, father & son duo to be arrested from sidewalk in front of school official's home for camping in protest of his son's expulsion after protesting a wrongful suspension. (Repeat for the bully's home, then back to the principal's, then run for the school board and when you win make that principal's life hell in that district. Bury a kilo of cocaine in her back yard and phone a tip in. Etc.)
Name and shame the principal and school. Nothing changes otherwise!
After all of that, I contacted my friend who happened to be on the School Board. He got me in touch with the Deputy Superintendent, who got my son placed in another (excellent) in-district school, where he excelled.
Both of my parents were teachers, and I'm familiar with school politics and their fiefdoms. If I had not had the benefit of this knowledge, we probably would have switched to a private school.