Yes it has happened. Some coaches ride the non-'star' players harder and the slightest thing can send them back.
I don't think its out of line for your son to ask the coach for a meeting after practice just so that he can understand what happened and he can change what was wrong, etc. I think I would have him approach the coaches first. Then if you or he are still unhappy with the answer, ask for a meeting for yourself. You have a right to know what was wrong.
As for the gossips in the stands, just say that you don't know why. the coach didn't like something at practice and sent him to JV. That you are still waiting for an explanation, and leave it at that.