Giving a Child Away
Given that he's just gone through another example of the kind of experiences that probably caused his problems in the first place, this boy is likely to have been greatly harmed by this action. Studies have shown, however, that this is often a vicious cycle - kids who experience frequent placement changes in foster care often develop behavior problems as a result, and one common cause of placement changes is behavior problems. And if you're already having trouble trusting, it's even harder to get over something like this.
But I'm not one to say that you should never give up an adopted child. This particular example is quite innappropriate, since as far as I can tell they didn't even bother to notify anyone that they were sending the kid back. But if you go through the proper channels to ensure the child's safety, it is sometimes justified to give the child up. However, you should only do this if it benefits that child or another child in the household.
For example, my parents cared for their niece and nephew. They didn't adopt the two, but nevertheless planned on the placement being long-term. Most likely, they'd have kept them until they both moved out on their own. One of them, in fact, did, although prematurely - she ran away from home around 16-17 years old and didn't come back. The other one, however, my parents gave up.
They gave him up not because he was hard to look after (which he certainly was). When, in his late teens, he was charged with sexually assaulting a classmate, my parents suddenly reinterpreted my quiet and subtly worrisome behavior, and realized that he could be sexually abusing me. They'd put an alarm on my bedroom door, so they probably had concerns earlier, but the counselors kept reassuring them that I wasn't in any danger from him. This incident made my parents realize that they were wrong, that he was a danger to me. So they separated us, by sending him away.
And that was the right decision, even though it likely hurt him, and even though it taught me that my parents' support can be conditional. As it turned out, he was abusing me - he admitted it a year later, and when asked at that time, I told them about it. (I also revealed that his sister had abused me as well.) I got counseling from a young age, and learnt that my parents would protect me. And I didn't get any further abuse from him.
Recently, a guy my Dad knows kicked his teenage daughter out of their home. She's been going out with a drug dealer, driving drunk and getting into lots of trouble. At one point, they found cocaine in their house, that she was storing for her boyfriend. Part of their concerns was legal, since they could be charged with possession if drugs are found in their house. Part of it was how viciously this girl had been treating her mother, and how much difficulty she'd been having with coping. And partly, it's that she has a younger brother, whom she has been verbally abusing and who has been getting more and more depressed lately. He's expressed fear for his safety, and they're hoping he can get better now that she's out of their home.
It's sad that this problem has gotten so bad, and that they've been unable to find some way to help their daughter. But under the circumstances, I think they're right in kicking her out (though it would have been better to put her into some kind of care). My heart goes out to her brother, and his safety and well-being should be a major concern for them.
Note, however, that both of these cases involve teenagers. I think it's a lot more serious a decision to send a 7 year old child away. A teenager can live on their own with difficulty, and as such are less dependent on caregivers if they have them. A 7 year old is highly dependent on a caregiver, both physically and emotionally. Their behavior would have to be very extreme, and the caregiver would still have a very high duty to ensure their safety.
Another issue, that this case makes no mention of, is the issue of support. Was this boy getting counseling? Were his parents getting counseling? It's virtually impossible for an untrained parent to handle a child with serious emotional problems without fairly extensive support. And many of these parents get less unofficial support - who wants to babysit a kid like this? Who wants them to come and visit their home, or spend time with their kids? My parents said many people congratulated them on what a good thing they were doing in taking in their niece and nephew, and then refused to do anything at all to help.
Given that, official supports become even more important. A counselor to help the kid heal and advise the parents, and keep an eye on any other children in the home. A respite worker for when the parents reach their limit, because parents are people too and they really do have limits. A school system that is trained and able to handle that child (so the parents don't need to pick up the slack all the time), keep their classmates safe (even if that means them not having any) and educate them to the best of their ability. And that's the bare minimum, more supports are better. Most importantly, everyone involved should keep in mind that not only are they there to help that child, but the child's family as well.