You release him, not because you are giving him what he wants, but because you are doing what is best for your program. He isn't going to play here, thats pretty much a given at this point. Why take the bad publicity and give other coaches ammunition for going at your program with other recruits? Sure you can block him from other programs, but at the end of the day who comes out looking better? I guarantee you it will be the 17 or 18 year old kid who is going to be able to play the victim very well and not the 40-50 something year old decision makers of the university forcing this kid to "not be able to live out his dream."
This could have been pulled off 10-15 years ago with no issues but with social media now it is impossible for the university to come off looking good.