Even if Lobo's heart wasn't in it and he was as drunk as he's ever been in his life, Wolverine simply doesn't have the strength to KO him.
I think the most telling aspect was simply that they didn't even show the fight. Wolverine leaps at Lobo, both making death threats at each other, they fall behind the bar, and then Wolverine gets up. That's it. Even the writers couldn't come up with a plausible scenario for Wolverine to "beat" Lobo, so they just handwaved it. That and the Storm vs. Wonder Woman battles were the two dumbest things in that crossover. The rest of the "voted" battles and the "second stringer" battles (which weren't voted on) were fairly well done.