I have $130$ helpful flags right now, $3$ declined, and around $37$ waiting for review. I was wondering, what would happen if a lot of the flags ended up declined? What threshold of missed flags are you allowed to have and what are the consequences of too many missed flags?
You'll get warned and eventually flag banned (i.e. you can't flag anymore, but otherwise you can use the site normally). For that to happen, you have to cast a lot of flags (10 or more in the past seven days) and a rather high percentage of declined flags in the past seven days: 10% for a warning, and 25% for a ban. Comment flags aren't counted (and neither are disputed flags), just helpful and declined post flags. As soon as the percentage is low enough, you get out of the ban, so a flag ban lasts seven days maximum.
The details are explained here by former Community Manager Shog9.