The bar stood to make a sizable profit on drinks and whatever else they serve. It was not a private showing it was public. And it was not for free just because no admission was being charged. This is a simple copyright issues that would be faced with pretty much anything they wanted to show and not get permission. Home video, be it VHS, LD, DVD, or BRD, has always had a disclaimer that it is for private home viewing and any public showing are prohibited. It doesn't take a genius to figure out that any public showing, much less a bar, would get in trouble for this. Lucas isn't the only one to enforce his copyright.
And I know a DJ and they have to have a license (very similar to radio) to play the music.
While a lot of people might get away with violating the public performance aspect of copyright, that doesn't mean it is legal, it just means they didn't get caught.
Now if this had been a private party and not at a bar, I might tend to agree with that Lucas would have gone past being reasonable, but this was a bar, a business, and they really shouldn't be surprised. Admission or no, they were going to make a profit from this.