I have no experience with the anxiety you are experiencing. I may, in fact, be entirely wrong in my advice. on the other hand your son is five years old and your husband is a "good egg". in my humble opinion you need to find a good home for the puppy, make sure that your husband understands your reaction and supports you and then tell your son that a wonderful family has asked to have your family dog because he is so wonderful etc. etc. AND that "Dad and I are sorry to let him go but our household just doesn't seem to be the right home for XX".
Your son is too young to understand or to share your childhood trauma. on the other hand I think it's best to end the experiment before there are attachments that result in problems. You have every right to avoid trauma and frankly there are many people in our Family who have not been able to blend difficult child's and pets into a happy family. Don't feel guilty. Hugs DDD