Could have handled this better...

Probably not the best thing to say, but it's not a hanging offence. I would think of a way to apologize, but able to still get your point across that quitting is an easy way out and that he may be labeled a quitter.

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I think he's afraid of the possible fall out. If the parents are that upset they can go over the coach's head and that's more wasted time he has to deal with explaining himself. In today's day and age you can't say anything anymore, it's rediculous.

Last week a girl in my class who has all types of problems kept telling me she couldn't concentrate and that she has axiety blah blah so she didn't have to do any work. In a serious reply I said, if it's that much of a problem for you to concentrate and sit still you should make an appointment with your doctor. She stormed out and told one of her counselors what I said and I had to explain myself.

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The only part you really shouldn't have said was "superstar".

I totally understand that, and like I said, the initial situation certainly could have and should have been handled differently.  But, at this point, this kid is no longer a player and the parents are no longer part of the program, so there really is no reason to deal with them, other than to mitigate whatever damage they can do talking to your remaining players and their families.  Your situation with a student is completely different because she is still a student.  If she had dropped out school and you saw her the next day and made the same comment (i.e. after she's no longer a student at your school), do you really think you'd have the same situation?  A little diplomacy is probably called for, but I think it's important to understand that the OP is now operating from a position of strength - he has all the leverage.  If he is willing to take the kid back, he holds all the cards to specify the conditions under which the kid can return. If he is not willing to take the kid back - well, the kid's decision to leave was his own, so the coach has absolutely no obligation to take him back.

Yes, you may have to explain yourself to the Board or whatever, but it should be a pretty short conversation.  It's not like the kid quit because of the coach's comments.  The kid quit first - the coach didn't make any comment until after the kid quit.  So, the explanation to the board goes something like this, "Well, I never addressed this player or his family with anything other than respect while he was a member of this program.  However, he made the decision to quit from this program, and only after he was no longer a member of this program did I point out to him that being labelled a quitter might have ramifications that won't serve him well in high school or anywhere else in his later life.  I would think that teaching this type of life lesson would be exactly what we're trying to do here.  If I had this type of conversation online with a prospective player in a different part of the country, I doubt anyone would have any issue with it - to the contrary I would expect to be praised for teaching appropriate life lessons that will serve the student well in later life.  I fail to see how this situation is any different.  Perhaps the Board should take a few moments to decide what our mission is.  If you all decide that encouraging this type of excuse making and pointing the finger at others when things don't go your way is characteristic of the type of player you want develop, please let me know and I will take my services elsewhere.  However, if you share my goal of teaching life lessons like accountability, integrity, discipline, sportsmanship, perseverance, and a desire to be the best you can be, then you'll support my decision with regard to this player and his family.  If he'll apologize to the team and coaching staff and promise to cause no more drama, we'll take him back; otherwise, he is off the team permanently."