Should Jay Nady have let the fight go on between Kostya Tszyu and Zab Judah?

People are making the mistake of thinking that Zab might have been able to survive because they've seen other fighters do so after being dropped and hurt. But you have to factor in who he was in against. As you say, Kostya is not only one of the biggest punchers of all time at 140 he's also ranked #67 by The Ring in their 100 greatest punchers of all time rankings. And then in addition to that you also have to factor in that he's one of the best finishers of all time and when he hurt or dropped you the follow up attack was absolutely lethal. Only 3 of his 18 victims since winning his first world title (and it should be 3 of 19 because one of his fights was ruled a no contest when it should've been ruled a KO) made it to the final bell and he didn't even try to stop the teak-tough Ben Tackie. He gave us a demonstration of his pure boxing skills in that one on route to shutting Tackie out.

It's not just the power it's the speed, laser accuracy and combinations and it wasn't like he was a one-trick pony who only had power in one hand you had to be wary of. No, he hit very hard, fast and was very accurate with both hands

Look what he does to Jan Bergman who was highly regarded back then after he drops and hurts him

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And same again after he stuns the big punching Sammy Fuentes

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Off the top of my head, I think there's only one opponent of his who survived to the final bell after being dropped. I could be wrong but his record attests that the chances of surviving to the final bell after being dropped him by were extremely slim indeed.