The issue you have presented is one of control, and the pertinent question is this: Who is in control of the household? As parents, we need to take charge, similar to the captain of a ship. And in this case, it sounds as if you have a mutiny on your hands. The bottom line is, if you let your son set the rules and control you with his threats, you are allowing an 11-year-old dictate to you what is important and how he will spend his time. That is a dangerous amount of control for a child his age.
That being said, it is time for you to regain control of the situation. Your son will not like that his threats are no longer effective, and he may even try issuing even more dramatic threats. Regardless of what happens, be prepared to stay calm. Calmness denotes strength.
It was a good idea for you to remove access to the internet and game time. Access to electronics and video games is a privilege unless it is specifically related to schoolwork. Privileges should be earned through time spent on priority activities, appropriate behavior and age-appropriate goals. It is important that you set age-specific expectations and rules for him, along with their correlating consequences and rewards.
As for his grades, if they are slipping, you need to know why. For instance, he may be distracted or having difficulty with the material. Or it may simply be a question of effort. Whatever the case, speak to his teachers and perhaps his school counselor to get to the bottom of the issue.