Why was P.L. really upset?

I always thought it was fairly obvious both from his reaction and what he says before he leaves the house. When the picture is turned round he realises that Stella's mother was the woman he had been trying to find and that the child he had fathered, who she was holding in the photo was the girl he had been having sex with.

http://www.flixster.com/user/dragon041964

He's upset because he's been unknowingly sleeping with his own daughter, I don't think he's disappointed that he did not have a son, at all. If you take the lines he speaks to Renee's photo as a whole rather than as single/individual lines it's more clear. If it still seems like 'I had a son' is the issue, then replace 'son' with 'child' (and mentally fill in the words between that are implied but not said) and it's a bit more clear what the whole thought actually is.

So - "There have been times...there were times I was close to death. I knew it...felt it. And, what I thought [when facing death] was, I have a son [child], and [if I die] it will not be the end of me [because I will live on through my child]. But it [my child] is [the end of me]. [And] I may not face it as well as I did death."

Or in other words, during the war when he was in mortal danger, his child (regardless of gender) represented, to him, his life going on even if he was killed. Now, after realizing that Stella was his daughter, his child has actually become 'the end of him', because he can't live with knowing what he's done. He has in a way died inside as a result even though he is still living (at that moment in time), and his child was in fact the instrument of that 'death'. (I also tend to agree that his later physical death wasn't intentional suicide, but do think it was somewhat passively so - he was a naval officer and thus should have gone through water survival training [be able to swim] and he's aware enough to have a vision of her while in the water, but isn't trying to save himself at that point).

I think the only reason that it matters that he says 'son' vs. 'child' is just to re-emphasize to the audience (as someone else already pointed out) that he had no reason to suspect that Stella was his own daughter, despite the telling clues like her resemblance to her mother ('I know her...') and even her name (her mother had used Stella Maris as a pseudonym). Even if all he had known was that he'd had 'a child' but not whether it was boy or girl, he still probably would have been a bit more wary of Stella's parentage and tried to find out more about her before going to bed with her. The fact that he had believed he'd had a son (vs. 'a child') is why he didn't suspect it in spite of the clues that were there, and I think that's all they're trying to get across by him saying he had a son.