Ron Grady: So, what about you and that rich babe you've been cruising to school with every day.
Jesse Walsh: What about her?
Ron Grady: Are you mounting her nightly or what?
Jesse Walsh: Hey, Grady, do you remember your dreams?
Ron Grady: Only the wet ones.
Freddy Krueger: You are all my children now!
Answer: I think the coach's death was a play on his character being at a S&M bar. People who frequent those places are usually into bondage and being dominated. Hence being tied up, and whipped with the towel. It also fits in with the homoerotic subtext throughout the movie.