Charles Mangin from Retroconnector has released a version for two players! Here is the info from his site:
One of the first games I ever played on my family’s Apple IIe was the Jordan Mechner master work, Karateka. Fight the bad guys, save the princess – it’s a simple but classic formula. My brother and I would take turns making our way through Akuma’s fortress. Even then, we wanted a two player version.
Fast forward more than 30 years, and I’ve taught myself 6502 assembly after getting back into the Apple II, through the thriving community online. The idea of a two player version of Karateka came back to me while at KansasFest a couple of years ago. I noodled a little on it back then, getting distracted by finding the code that created the unique music in the game.
Long story short: I finally found the places in the game code that needed patching to allow a second player to control the enemies in the game, and create a functioning two player version of Karateka. The resulting patch is only 42 bytes long.