Rob Zombie literally just posted this on his MySpace blog:
I know some of you are confused as to why Daeg is not in the film. Recasting young Michael was not something I wanted to do, but the scenes just didn't work anymore. Daeg is no longer a little boy, he is a teenager with a deep voice. Once you see the film you will understand why I made this choice. It was not an easy choice and was not made lightly. Daeg kicked ass in Halloween, but things change. I think Daeg is very, very talented and I wish him all the best.We'll miss you, Daeg!