It looks and sounds like rain rot to me. I agree with appylover, when you run your hands over his skin, do you feel bumps? My girl has had rain rot a couple times -- it's a pain, but not anything to worry about. I washed the affected area with Mane & Tail Anti-Microbrial Shampoo and it worked great. Work it down into the coat and let it sit for 10, then rinse off and try to peel off the scabs. Rain rot is yucky and gross, but your horse will be fine.
*Also, you may want to consider a rainsheet if he's exposed to lots of wet weather outdoors. Some horses are sensitive to wetness.