RE: What would you do.
Think about it this way. If you did let him shoot, what would you really have taught him.
Maybe taught him that it is more important to tresspass just so he could get a deer.
Maybe taught him that it is OK to ignore ethics.
Eventually he will be hunting on his own one day. If he was taught at a young age to be unethical, imagine what he would do later on.
He could possibly consider taking unsafe shots at game, thinking that bagging a deer is most important.
You did the right thing!