what is the remedy for a contractor who has done inferior work that requires tearing down and rebuilding?

You have a breach of contract claim against your contractor.  He both breached the contract with the specific question of 9 feet ceilings.   He also violated the building codes which are implicit any contract.   The problem is the contractors insurance may not cover this defect unless there was ancillary damage to other parts of the property.   I am presuming you did not require or request a bond as most residential owners do not.   Hopefully your contractor has some assets and/or some scruples and will fix the problem for you at his cost. 

You have a breach of contract claim against your contractor.  He both breached the contract with the specific Quetion of 9 feet ceilings.   He also violated the building codes which are implicit any contract.   The problem is the contractors insurance may not cover this defect unless there was ancillary damage to other parts of the property.   I am presuming you did not require or request a bond as most residential owners do not.   Hopefully your contractor has some assets and/or some scruples and will fix the problem for you at his cost.