That was the worst effing shoot-out I have ever seen in my life.
The first thing to be aware of is that this is colloquial speech. I don't recognise the quote, but my guess would be some kind of gangster movie. Whether or not that is really how gangsters speak in real life I have no idea, but in movies, they tend to be portrayed as uneducated, street-wise people and the language they use does not stick to the rules of English grammar. It isn't the best example for a non-native English speaker to study.
You said that you don't understand why it uses the past tense "was", but you seem to understand that the shootout has ended because you described it as "failed". It doesn't matter if something ended 10 days ago or 10 seconds ago - it is in the past, and so that part of the sentence at least is correct. The speaker is commenting on the shoot-out he just witnessed, not on an ongoing shootout that is occurring in the present.
The only thing that I consider ungrammatical about the sentence is that "..I have ever seen in my life" is a tautology, that is making the same point twice. It would be better to say either:
That was the worst effing shoot-out I have ever seen.
That was the worst effing shoot-out I have seen in my life.
They both mean the same thing and saying both is unnecessary. This sort of thing is common though in colloquial speech because in all languages people tend to speak as they think, and spoken sentences are not always pre-planned out to the rules of grammar. Making a sentence unnecessarily lengthy must make it difficult for non-native speakers to break down into clauses and perhaps this contributes to your confusion in this instance.