My son's Little League baseball coach plays his own kid at first base, even though my 10-year-old son is a more talented first baseman. I know this father's a volunteer and gives a lot of his time, but shouldn't he play the kids on the basis of skill, not nepotism?
Of course, you're right; a coach should play the children based on their skills alone. But the truth is, even the best-intentioned people can act unfairly when their own emotions are engaged. The coach is functioning in two roles. As a father, he has an obligation to show special concern for his own son; as a coach, he should treat all his players equally.
So obviously, it would be better if the team's coach were not also the father of one of the players. On the other hand, Little League teams rely on volunteers to serve as coaches, and without such a familial connection, the Little League would probably have a great shortage of coaches.
Let's say you go to the coach (perhaps with another father) and express your concern. You might suggest that the decision as to "Who's on first?"--and that decision alone--should be made by a parent who is unrelated to any of the possible first basemen. You do run the risk of alienating the coach, who is probably not going to take kindly to this suggestion. Even if he agrees, it's possible that if an "outsider" decides to replace his son with another player, the coach might conclude that he no longer wishes to volunteer his services. Would you then be ready to step in as coach? If you aren't, I'm not blaming you. I'm just being realistic.
Finally, if your attempt at arbitration with the coach fails, what then? You could try to get your son onto another team, although there's no guarantee that he'll be appreciated there either. Or you might see if your son has aptitude at another position. Can you imagine if it turns out that he's a great third baseman or left fielder? Good luck.