KTCOTB,
Your post seems to indicate your son has made up his mind about school baseball, and he isn't sufficiently self-motivated to change his place on the team or his skill set. If that is the case, the outcome will be predictable.
As a parent, I understand your frustration because this is 100% on him. I agree with CabbageDad that maybe it is time to sit down and have a heart to heart where you ask the questions and let him talk about what it is going to take to find that baseball passion again. I have 3 sons. I knew what buttons to push for each of them, and I also know when it was time to move on. Again, sit down with him and just listen. Don't let him make excuses but allow him to make a decisions. Hopefully a plan to go forward with baseball will come out of it.
Good luck!