Dual citizenship is not technically dual.
You can hold on to his US passport and apply for OCI (overseas citizen on India) or PIO (person of Indian origin).
But the better of the 2 is the OCI card since then you don't have to report every 6 months at the Police station/visa office (I am not sure which of the two) which you would have to do incase of PIO card.
And moreover OCI is lifelong visa to India unlike the PIO which is given for 15 yrs or so.
The only thing is OCI cost around @250 per person while the PIO is hardly $50 but then you have more advantage with the OCI since it is lifelong and no reporting to the police/visa office in India every 6 months which you are pretty much aware what hassle it is.
You can apply for OCI from India too....if I am not wrong. Please check the website
Overseas Citizenship of India (OCI), Dual Citizenship for India
Other than that it is called dual but in true sense not dual at all. Dual means you can vote or hold public office in both countries but here your son cannot vote or stand in elections or be a part of military in India since he is a US citizen.
Yes, definately it is a big PLUS to have US citizenship since he can go to US for higher studies or also to any other country very easily since US passport is valid in many places.
Sarada