This is the first instinct where the meme really has nothing to do with the context of the episode. "The Smoking Peanut" is ...

no eye-gouging or tentacle biting...now let's rumble! What kind of game do you want to play? Arcade or tournament? Choose a fighter: SpongeBob, Patrick, Sandy, Squidward, Larry or Mr.Krabs.

Of course, Squidward kicked him out once he fully woke up (hence the wide eyes ... sums up the humor of SpongeBob SquarePants than this moment in “Arrgh!” when Mr. Krabs tosses a customer ...