In a sports competition, to be "knocked out" usually means for the team or individual to be eliminated from the competition. It would be unusual to ask, "Why did you knock me out?" because that is the whole idea.
In the game of dodge ball, each player is eliminated from a game one at a time and as such it may be reasonable for one player to ask that question to another player. "Why did you knock me out of the game? I thought we were friends."
Care should be taken using the phrase, as in more common usage "knocked out" can mean to make someone unconscious. To be sure of not being misunderstood, "Why did you get me out?" would be clearer.
In the example given the speech is informal between two people who understand the context and therefore the listener understands the meaning of "knocked out" as meant by the speaker so all is good.