Does our 7yo have an at home discipline problem or is it something more?

Turning his punishment into a game is a TERRIBLE idea. It is supposed to be unpleasant and not at all related to candy. I think that he could stand being tired for a few days to learn WHY he has a bedtime. The misery of not being able to keep his head up in cl should teach him something. He sounds like a good kid, but he COULD use some boundaries. As his parent, it's totally up to you how you handle your kids, but I have found that for mine, sentences and the taking-away of privileges never works. The violent threats are pretty shocking, I would do something that didn't trigger another tantrum.