It's not acceptable to hit anyone, this is not "disciplining" it's physical abuse.  For an 11 yr old to hit a 2 yr old is so not acceptable.  Even if the 2yr old did hit him, which I doubt, how hard can a 2 yr old hit?   I wouldn't believe SS11 - don't leave your toddler alone with him any more. 

Why is your 2yo hitting the 11yo SS 3 times in a row and the 11yo kept telling him to stop and your 2yo isn't listening

I have steps from all ages and what I noticed is that the younger ones got away with stuff like that to other children and in the end they grew up to become awful children, teens and now young adults

Teach your child to keep his hands to himself and also put some boundaries for your son around SS because if not, SS will snap again. If you leave your child unsupervised and he is hitting and going at SS under the guise of playing, SS may not understand it and snap and hit back...he is only 11 so very immature to handle another 2yo...

I cant count how many times I have had to separate my steps. The 4yo and the 6yo would hit the older steps and then when hit back they would cry and say they have a mom and dad if they did anything wrong lol...My husband and BM2 would do nothing about it but laugh and think it's cute that they are so "playful"...

I had to put boundaries between the children so that they don't end up fighting and hitting (especially because they were all boys) and learn to keep their hands to themselves...Unfortunately it didn't work in the long run but for the time I supervised them, it did 

Your DH thought it was ok for the 11 year old to hit the 2 year old? There is your problem. As long as he thinks it is ok, the SS11 is going to keep doing it. They should never be alone together moving forward. And, while I hate to defend him, an 11 year old boy probably doesn't want to spend a lot of time with a 2 year old, even under the best of circumstances.

SS is a CHILD, not a parent. Parents discipline. Period. Dot.

Oh hell no. SS smacked our DOG once and that was it. When SS (more than three times the age of your SS...embarrassing!) was then yelling at our dog to get out of the kitchen, I had to redirect him and explain HOW to get the dog out of his way by telling him to lie down rather than do the chase and bully act. 

Can you and DH give SS ways/tools to deal with your toddler and let him know he can ask for help from you? But, again, you have to be on the same page about the no hitting rule. Fights might be ok or the norm at his mother's house, but you need to make it clear you're not having it in yours. 

At 11, your SS is well old enough to know better than to hit a toddler.  He is old enough to figure out that the correct course of action is to come to you (or your DH) and say "Hey.. little brother has hit me 3 times, I'm sick of him being an annoying little brat.. you need to watch your kid"  (or some version of basically telling you that the toddler is being too rambunctious and that parents need to watch him and keep him from pestering SS) And then your response can be.. thanks for telling us SS.... we will keep him in here with us.

Because.. on the one hand, it's not SS's responsibility to watch his little brother... and accept being pestered.. but on the other hand.. it's not his place to discipline his little brother and certainly NOT his place to lay a hand on him.. (assuming corporal punishment is not done in your house at all towards either.. if it is.. then ss not understanding appropriateness of the use might be part of the issue here).

Your SS's physical interventions with your younger child should be limited to stopping him from touching a hot pan.. and if the kid is wailing on him.. at most holding his wrists to prevent further strikes as he calls out to his dad or you to come deal with his little brother.

I am a bit surprised your DH was ok with SS hitting his younger child.. 

Since you are also seeing SS doing corrections.. then perhaps you should also be more mindful of keeping the kids apart.. or supervising.  And.. I know parents love their kids unconditionally.. but consider if there is any merit to your SS being upset or annoyed by your younger son's behavior.. is he allowed to be overly disruptive? and while that might not bother you.. do you think it might not be as cute to others?  I, again, do not support SS's reaction of hitting your child.. at all... but that doesn't also mean that your younger child's behavior is something that doesn't need some more moderation.. and even if things might not bother you.. if they could reasonably bother another.. you should still be stepping in.

Example.. SS trying to play a video game.. and younger sibling keeps yelling.. or throwing balls in front of screen.. or something distracting.. you may not necessarily mind the extra activity.. but clearly it could be pretty bothersome to the kid trying to concentrate on his game.. or homework.. or whatever.. and teling younger kid to tone it down because others are trying to do things is important too. 

First of all how hard can a 3 yo hit.  SS should of informed you of DS. behaver.  For you to handle DS.  A 11 YO can really hurt a 3 yo.   He was not DS parent abd hitting is not a form of discipline. You bigger problem is DH who thinks this is all ok. 
'SS  is reacting to his lost of importance in the family. 

DH needs clarity that his 11yo does not parent nor discipline your joint 2yo. the 11yo has the duty to protect the 2yo, not parent or discipline the 2yo.

I am 6yrs and 8yrs older than my brothers.  I was not their parent. I was their big brother.  I cared for them, played with them, etc... I did not parent them or discipline them.

Our parents had zero lack of clarity on parenting and how their boys would interface with each other.

I find the zero response to a bloody nose from a 5yo at BM's from SS-ll and a 2yoin your home got smacked in the stomach for playing rough interesting and in need of a very clear message for the SKid..

Your SS is clearly jealous of both you and your toddler because y'all get dad full-time. You DH needs to address this.