If he has all or most of his teeth, I would cut back on the canned food and get him to shift to the dry. Canned food causes their tetth to go bad much more quickly. And the dry food tends to be more nutritionally balanced.

But at his age, he may have had some teeth removed, so the canned food is easier for him to eat.

What weight do you want to hold him at? He is at 12 pounds now, that is a good weight for most cats (not the larger breeds). And 21 pounds you already agree is too much. I agree with the other posts, what you are feeding him now, 2 cans per day, well, that is more than enough for one cat, it's no surprise he isn't eating much of the dry kibble.

One sign of diabetes (since you asked) is constantly eating, constantly urintaing, a losing weight. Doesn't sound like he has those symptoms and as you said, he's been tested and is OK for that. Whew!