I agree with everyone else on keeping an eye on your pup, you wouldn't want to lose him if he bit in self defense! But also..
You should not grab someone else's small child by the ear. That's as cruel as what he did to your dog, and he's just a little boy. I can't understand why you're surprised his mother doesn't want to see you. So my advice in the future would be:
Hide your darling if small children are over

And never grab small children like that.
I really hope things work out with your friend and this story has a happy ending.