I think being TT in the 3 year old room is a bit harsh. They're using a very common practice that's outdated and actually should be changed. The coordinator of the centre can come into the room to cover the supervision aspect while your DS is being changed. I'm thinking its against the regulations or quality practices to exclude because of toileting habits. I'm a sessional kinder teacher with a background in childcare. We change nappies in 4 year old kinder.
Here's a contact page for The Department of Education and Early Childhood Development. They'll be able to give you some clearer info so you know what the requirements are for the centre, which might give you some breathing space.

http://www.education.vic.gov.au/chil.../concerns.aspx