I wondered how it was that Tifa lost too, afterall she was one of my strongest aswell (stronger than Cloud for sure) but it hink it was just meant to make Loz seem like a good fighter, he comes across more of a pushover (no offence to his fans) or a crybaby, so they had to make him look like he fitted in somehow. Plus Tifa hasnt fought for nigh on two years, maybe her skills have dwindled slightly.
Despite all it's faults AC and ACC are great films, in my opinion. I loved the bonus footage and Denzel's story in ACC.