Johnny Lawrence (William Zabka) and Ali Mills Schwarber (Elisabeth Shue) were finally reunited in Cobra Kai season 3, but despite their chemistry the pair are better off just being friends. When the high-school sweethearts hooked up they hadn’t seen each other since Johnny’s humiliating defeat at the end of The Karate Kid courtesy of Daniel LaRusso’s (Ralph Macchio) flamboyant crane kick, but there was still romance in the air and a sense of unfulfilled destiny as they enjoyed the encounter they were always denied at Golf N’ Stuff.
A lot of water has passed under the bridge when Johnny finally goes on a date with Ali, but the lovestruck Sensei brings a lot more baggage to the table than she does. He may be the owner of Eagle Fang Karate but as the reconstructed deadbeat confesses, he spent too much of his 20s and 30s partying hard and ended up a rotten partner and lousy father who drinks too much. Ali meanwhile is a successful doctor with two adoring children. Johnny apologizes for how he treated her in high-school and when Ali tells him she’s getting a divorce you can see her old flame’s eyes light up with possibilities.
The buried pain Johnny carries with him regarding his relationship with Ali comes bubbling to the surface when he sees his old flame chatting innocently to LaRusso at the holiday party at the Encino Oaks Country Club. His reaction to seeing his first love and his old enemy chatting amiably together is a regressive one which instantly transforms him into a hormone-fueled and irrational teenager. As long as Johnny still carries a torch for Ali and she continues to occupy an almost goddess-like status in his mind, and he can’t let go of the past which nearly destroyed him and embrace a more positive future as a successful Sensei and build a healthy relationship with his fledgling love interest, Carmen Diaz (Vanessa Rubio).
Ali was the relationship that defined Johnny's life. Before Daniel LaRusso rocked into town, Ali was regarded as Johnny’s girl. He may have split up with her before the timeline of events in The Karate Kid but he had high hopes of getting back with her. LaRusso denied him of that hope and in doing so was forever immortalized in Johnny’s eyes as the guy who stole his love. Without that perceived theft, it’s doubtful if LaRusso would ever have been a significant presence on Johnny’s radar. Hence, no dispiriting defeat at the All Valley Karate Tournament which sent Johnny reeling on a three-decade-long bender, and is responsible for the fierce rivalry he shares with LaRusso that defines Cobra Kai.
Although Johnny and Ali nearly kiss at the end of their date in Cobra Kai season 3, episode 9, “Feel the Night,” they're distracted by a text message at the last moment. As Ali wisely warns him in the next episode, “Sometimes it's good to visit the past, to know where you are now. But you can’t live in the past.” Being overtly nostalgic has crippled Johnny’s development for most of his adult life. Johnny sought solace by blaming Daniel LaRusso for the end of a relationship that probably wouldn’t have stood the test of time in the first place.
If Johnny tried to force a romantic relationship with Ali it would be a huge mistake. They were childhood sweethearts and she reflects a time in Johnny’s past when everything seemed picture-perfect. Every disaster in his life since he has equated with losing her. If Johnny did rekindle his old romance with Ali it would prevent him from facing his responsibilities and growing up. No one person is the answer someone's problems, and it is unhealthy to expect them to be. By simply remaining friends with Ali and nothing more, Johnny is letting all those inner demons go and finally moving on to pastures new. As he said during his final hug with Ali in Cobra Kai season 3, “I needed this.”