Powering a low current device from a mosfet N
Vgs threshold voltage is ranging from 1V to 2.5V according to the datasheet. The source voltage is regulated to Vg - Vgsth --> 5.6V-1 to 2.5V. Seems like your Vgsth is around 1.6V.
For better understanding consider you have a resistive load on your mosfets source. When the current through the load rises so does the source voltage. This leads to an reduces Vgs which results in an higher Rdson of the mosfet and therefore a smaller current, which again results in a higher Vgs voltage.