John Steinbeck included the fight between Curley and Lennie for a specific purpose. He knew he could not just say that Lennie was extremely strong or just have George say so to others: he had to demonstrate it--especially because of the way Lennie lets George, who is a small man, boss him around. But Steinbeck had a peculiar problem with this story, which is partially explained in the e-Notes "Introduction" in the Study Guide.
With the success of the novel, Steinbeck worked on a stage version with playwright George Kaufman, who directed the play. Of Mice and Men opened on Broadway in New York City on November 23, 1937, with Wallace Ford as George and Broderick Crawford as Lennie. The reviews were overwhelmingly positive, and the play ran for 207 performances, winning the prestigious New York Drama Critics' Circle Award.
The book and the play came out in the same year. It is easy to see that Steinbeck wrote the book with the play in mind. That explains why there are no panoramic outdoor scenes in which Lennie could be shown using his enormous strength to load huge bales of barley onto the horse-drawn wagons. It also explains why the book is so short that it is usually called a novella and not a novel.
There are essentially only two settings in the book. The main one is the bunkhouse, and the other one is the barn, which also includes Crooks's little attached room. These two settings could easily be adapted to the stage. The opening and closing scenes by the riverbank could be faked onstage by keeping most of the stage in darkness and having an imitation campfire lighted electrically by a couple of colored globes.
But Steinbeck wanted to show Lennie enormous strength in an indoor setting which would be easy to adapt to the stage. So he created a fight with Curley in the bunkhouse. It is noteworthy that the two men do not push each other around. Lennie simply grabs Curley's hand and holds on. So the incident could be staged with hardly any choreography.
The fact that Steinbeck wrote the book with the intention of turning it almost immediately into a stage play is also evident in the dialogue. In most plays the exposition is conveyed through dialogue, whereas in novels the exposition is generally conveyed in the narrator's prose. Steinbeck probably made Lennie a retard because this requires George to explain everything to him in detail and often to explain it all over again. George tells him where they have been and where they are going. He also describes their relationship and their dream about having a little farm of their own.
The fight between Curley and Lennie was not intended to illustrate the hostility of ranch life, although it does tend to illustrate the hostility that the other men feel towards Curley. Ranch life was more exhausting, depressing and monotonous than hostile. Steinbeck had to invent some dramatic incidents in order to keep his story from being dreary and looking dull on the stage. This explains the creation of the sexy girl married to Curley, the fight between Curley and Lennie, and the accidental killing of Curley's wife in Chapter 5.
In studying the novella Of Mice and Men, it is useful to keep in mind that Steinbeck was thinking of turning it into a play. The story's message could reach a bigger, more intellectual, and more politically important audience in the East as a stage play. California in the 1930s was a relatively unimportant state far distant from the centers of power and culture in the East.