One commenter posited that Johnny was persona non grata because Cobra Kai was banned from the tournament after 1985, when Barnes used a series of illegal hits to torture Daniel before his overconfidence cost him the match. Johnny, as part of that history, may have been collateral damage when Cobra Kai was cast off.
On the other hand, it may simply be that the board doesn't know. The tournament organizers didn't seem to remember that Cobra Kai had been banned from the tournament until Daniel reminded them; they might not even have put two and two together to realize that Johnny had also won twice. They remember Daniel's wins, because Daniel won't let them forget. Half his business strategy is capitalizing off the local fame of his karate prowess to sell cars across the San Fernando Valley. As one commenter pointed out, Daniel was the Kerri Strug of the All-Valley Karate Championships, competing while injured and leaving them with the indelible image of the crane kick — not to mention getting badly injured by Mike Barnes (Sean Kanan) the next year. It's a lot of drama for one local karate tournament.
