no, i dont think a child that age shold be expected to be social necessarily, especially considering the new baby. kids often regress, as i am sure you know.
my thoughts about it are that 2 days in preschool arent enough to really guage if he would adjust to that or not. i have a very shy son, andi had to put him in child care for a few hours a week this semester ( i am a student part time) and it took him almost two weeks of monday -wed-fri , 2 hours each time, to adjust and stop crying when i left and picked him up. now he looks forward to going and gets excited when we get to his sitters house , whereas before he would cry when we pulled up to her house and say "no no no no!!!"
not to say you SHOULD put him in preschool...my preference for my own son is still to have him at home, even though i love the childcare he is getting. but i do think it has helped him tremedously with his shyness, especially around other kids. he never would play with them before, now he is starting to at least smile and be interested in other kids we see in public. and he will play with the kids he knows. but still , thrusting a shy kid into daycare might not be the best solution for every kid.
i was a shy kid too, and remember it well. i wouldnt push your son too hard....he is still so young and it is so hard to tell if his shyness is just a temporary phase.
maybe invite a child over on your sons own turf and get down on the floor and play a kid game with them, like music, or something, where they dont have to focus on each other, but are still having fun together. my son reacts well to that, the pressure is much less cuz we arent focusing on him, and then he "slips" and interacts in a relaxed way with the other child. seems like a subtle method works better when coaxing shy kids. just my opinion! good luck!!!
oh and p.s. my son gets weirded out sometimes when we praise him too. i think thats a matter of following his cues..and i just quitly smile or beam at him without saying much when i approve of something great he has done ( i constatly experement with how i give him praise--he responds differntly all the time, so i try to be flexible and show excitement sometimes, other times just act casual about it)