Sir would have regretted not taking the engineering job eventually...

I just watched this a couple of days ago. Yes, great movie. I think that he declined the engineering post because he found the connection with the kids more personally fulfilling than when he was an engineer.

I must have viewed the ending wrong; I thought he was happy at the end because he was getting the engineering job and didn't have to deal with another pack of miscreants the next year.

While he's well aware of the practical necessities of life, given his background, he also understands that there's more to life than just the practical necessities. He worked hard to get an education himself, to open up the range of possibilities before him; obviously he sees that doing this for others, who might otherwise end up going into pre-slotted & dead-end lives, is a worthwhile pursuit. He also know that while it's entirely possible to get the engineering job & leave it later, all too often, once people make the "sensible & pragmatic" choice, it's easy to become stuck there, losing hold of your deeper dreams & possibilities.

I'm retired now, and I saw this happen with many people I worked with—they were good at their jobs, respected by their peers, certainly making good money, not displeased with their overall situation ... but they also felt the loss of something that had once mattered deeply to them. For some, it was merely a lingering regret, one they could live with; for others, an unhealed & always painful wound.

Sir made the choice that was right for him.

He stayed at the school to wait for Pamela to turn eighteen.

I agree with you there, but it was his choice. Maybe down the road he did quit teaching and became an engineer. Or taught engineering at a university.