I would discuss with your son how he feels about the situation. If he's aiming to get better and perhaps make the team next year, this would be a great way to build up skills and work with the coach. However its not the greatest situation since it would be all of the work with none of the reward of being on the team.
You could also look into club soccer teams or other local soccer leagues for chances for your son to play.
That is a difficult predicament and to be honest with you, I've never heard of a player making a team after tryouts, but is later told they will not be put on the roster (unless he's in college – which in that case, he would be “redshirting”). From my understanding, you have a tryout to deduce the amount of players to the actual roster size. I'm not sure exactly if there are any other variables or details involved, but that to me is unacceptable. Another way of putting it, hypothetically, even if your son's team was up 6-0 with 10 minutes left in a match, his coach “would not be able” to even put him in the game. I mean, obviously if your son is in college and he is “redshirting”, then you can go ahead and disregard what I am saying. But if he is in high school or middle school, I'd like to hear the would-be grand justification the coach will have to conjure up as to why your son is not on the roster after making the team.
BUT, let me dial it back a little bit. Let's take the stand point that for whatever reason, what the coach did was justifiable and legitimate. Let's go over this with a positive outlook and the mentality that “what's done is done and let's move forward the best we can.” The first thing I would do, is have your son speak to the coach about what areas of his game need most improvement. Every player in any sport has a weakness. The only way he/she is ever going to improve, is to attack it; not shying away or avoiding it. If your son is serious about playing soccer, he will probably want to spend some extra time outside of practice to hone his skills. I strongly suggest joining a club soccer team, an intramural team, or even an indoor soccer league. I can guarantee that at least one of these suggestions is available in your area. Also, as a parent, help to make sure that your son is also mentally fit for the game. When something like this happens, it can be a huge hit to a person's ego. Being that he is only allowed to practice, there is tendency for players to act like “slouches” or “take it easy” at practice...I mean after-all, they are ONLY on the practice squad. “Why do I need to work hard? It's not like I'm going to play anyway.” That is the type of mentality you want to help your son avoid. He needs to go into practice ready to outwork everybody and hustle! As of right now, this is his match, this is his time to prove that he belongs out there on the field with everyone else. Remind him: “It doesn't take athletic ability to hustle.”
Obviously, the goal here is to take his game to the next level so that your son's coach will hopefully add him to the roster and allow him to play this season. If not, hopefully it propels your son's skills to the point where he plays next year or even develops a lifelong love for soccer. This situation becomes a chance for him to learn from the best players on the team and to figure out what it is that they do to be successful. It's a chance for him to learn the coach's tendencies and what he favors. Moreover, it's a chance for him to grow as a person and to stare adversity straight in the eye, and beat it. I know it's just sports but this is a life lesson in the making. Life is continuously going to throw unfair situations and curveballs at you, and it's how you respond to them that really builds character. Here is your son's chance to be faced with a difficult situation, respond, work hard, and overcome it. Even if it doesn't amount to making the roster, the fact that he knows within his own heart that he gave it his all instead of laying down is the most important thing. I apologize this is turning into an inspirational novel so I'll leave with you this:
“The ultimate test of a man is not where he stands in moments of comfort and moments of convenience, but where he stands in moments of challenge and moments of controversy.” - Martin Luther King Jr.
Can you find other ways for your son to continue to play? It just seems to me it could be demoralizing for him to play with a team he isn't actually on. Even if he is looking to improve his skills to try again next year I'd look for some other way to do this besides practicing with a team he wasn't chosen for.