What should be done about our dog?

My 3 year old daughter attempted to take our American Bulldog's chew toy, and he got upset and swung his head at her. He did not try to bite, but he did have his mouth open the same way as when he plays with his sister when she visits. He did leave three marks on her face from the side of his teeth, though. My husband feels we should find our dog a new home, his teenage kids want the dog to stay. I want the dog to stay because he really does have a sweet demeanor, but I don't want my daughter to actually get hurt. Is there a humane alternative to finding him a new home....or is it best he goes? He does have a kennel, but I don't like him in there for very long, and I hear muzzles will tear at the skin if left on longer than 20 minutes at a time.