Hey, I guess I'm kind of new-ish here (mostly a lurker), so I hope you don't mind me jumping in, but I've been reading Catch-up's story and I guess I wanted to say - well done, you.
I work as an assistant English teacher in Japan and the culture here is pretty different, to say the least. For one thing, teachers are expected to be far more involved and caring about the welfare of their students, whereas parents take a bit of a back seat. I've also never encountered a teacher who was so arrogant as to be "upset" when someone criticized the way they were doing their job! If someone is criticizing the way you're doing your job, you'd better be prepared to either defend your actions logically and sensibly or eat some humble pie and try to figure out how to improve (and for the record, most of the Japanese teachers I've worked with take the humble pie route about 99% of the time...)
Honestly... it's a bit philosophical, but I think a child's education should be a sort of agreement between the child, the home environment (whatever that may be - parents or otherwise), and the school. If one of those is out of kilter, that can be really damaging. So logically, from my perspective, it's your right as a parent to work with the school to get to the bottom of what's going wrong there. If they're not pulling their weight, call them on it. And yeah, obviously it doesn't make sense to make yourself unpopular, but really... I just can't get over what sounds like the arrogance of the teacher in that position. For goodness' sake, if you're in charge of the education of children, as well as their welfare for a third of the day... you'd better be doing it right! Kids can be pretty vicious and it's the duty of an educator to create an environment where they are made aware that behaviour like that is NOT OK.
Anyway, I hope the situation works out well. It seems like you are taking a far more sensible and helpful stance than you otherwise might, so hopefully the teacher/ school will get their backside in gear and start acting positively.