Keyword being "so to speak". And if I remember correctly real word physics carry over to the toon characters as well, which still gives justifiable reason that Iron Man would beat Bugs Bunny. You're still not giving any reason in which Stark can't beat Bugs besides "he's a cartoon".
I didn't realize more was needed. Yes, those "real world" physics carried over, and yet it's still established that the only way to reliably deal with a toon is The Dip, a concoction Stark has no knowledge of and no access to. This is much like the way The Flash has access to Speed Force outside the DC Multiverse. I just can't think of anything Iron Man has to deal with a toon so easily.
That's not to say Bugs couldn't be stopped, even by Iron Man, but the talk of "one shot concussion blast, Stark wins" is silly.
And then there is the point about Bugs being a master manipulator, trickster, instigator, and an expert with disguises, traps, and ambushes. Bugs has been able to fool others even while changing disguises right in front of them.
Iron Man takes to the air. He flies in a strafing pattern by his opponent, blanketing him with repulsor fire. He scans the area for signs of his enemy, and finds nothing. He lands as the dust settles, and beside him appears Bugs disguised as a bartender (with mustache) complete with bar. He acts impressed by the light show.
"You really showed that guy, doc. This one's on the house."
He pours a drink for a confused Stark, who takes a moment to answer.
"No thanks. I don't drink."
"But I insist, the way you handled that cotton-tailed menace was simply marvelous. You know you deserve this drink."
The bartender picks up the drink and pushes it towards Stark, who places his hand up in front of it.
"No, I don't."
"You do."
"I don't."
"You do."
"I don't."
They continue the reverse-tug of war for a bit longer.
"YOU DO!"
"I DON'T!"
Then the bartender switches gears, pulling the drink away.
"You don't."
Stark, befuddled by the gambit, tugs back at the drink.
"I do."
"You don't."
"I do."
"You don't!"
"I do!"
"YOU DON'T!"
"I DO!"
"Alright doc, you deserve it."
The bartender relinquishes the drink. Stark opens his helmet to partake of the beverage. As he begins to bring the glass down, he notices too late that the bartender, who has dropped the mustache now and look a helluva lot like the rabbit, is swinging a large wooden mallet right to his face. If he had a second longer to think, he might have felt like a jackass.
Bugs wins.
EDIT:
If you don't mind being a little more clear with me on this are you saying that if toon physics apply Bugs doesn't have to abide by the tournament rules and can do whatever he wants? Because of that is the case he shouldn't be in the humans bracket and maybe shouldn't even be in the tournament itself do him being too powerful. If toon physics don't apply he's just a bunny, which means it's even easier for Stark to win. Just like you to be more clear on this.
I agree that there is a power balance issue and that Bugs probably doesn't belong in the same tier as many of these guys. BUT the organizers already know that there are a few hiccups (see also: Buffy) and have decreed that we just make it work and move on.
Stark can kill him, toon physics work both ways in the both those movies, you can Jose seem to have selective memory.
I cited Roger Rabbit, where it is stated there was only one way to kill a toon. How is that selective memory?
I don't know why people are so intent on trying to prove a cartoon character can beat Iron Man. Bugs should have never beat Boba Fett.
That's just, like, your opinion man.
). 
