Firstly I would say that time spent practising music is never time wasted!
If he is happy keeping and is working towards his grade 5 then why not let him continue.
I freely admit that I was rubbish at practising my flute when I was younger...but some how managed to scrape grade 5 when I was about 13. I did give up lessons soon after, and would never have considered played in the orchestra but I loved playing in the windband, which I did till I left school at 18, and it was a highlight of the week for me. I also enjoyed playing in various church things at Uni and occasionally afterwards.
I ended up taking up lessons again in my late 20's and actually did some practice this time and passed my grade 7, an achievement my school flute teacher would not have believed possible!
Not sure what I'm saying except that music is a joy and is of value even if you don't "do anything" with it, stopping lessons doesn't mean that you need to stop playing, but why take it away from him if he wants to continue.
I think if I'd given up the flute completely I wouldn't have come so far on the oboe, or even maybe had the confidence to try. .Sometimes the benefits aren't evident till years later...