From what I've been able to deduce, it's a subset of domination fetishes, tied to related psychologies. For some, it's about seeing someone lose (as evidenced by this thread), for others, it's about seeing someone win (as in my case). It's about which is preferred, the domination or the dominated.
Further, I posit unarmed fighting as a pseudo-sexual activity in and of itself (or a form of foreplay). The loser is often left deflated and on their back, breathing heavily, often mimicking languid post-coital behavior. 'Knockouts' are so often used to demonstrate both the degree of dominance and add to the post-coital nature of the activity.