A couple of points here . . .
1. I'm not overly keen about letting someone from the audience get up and sing because, usually in relation to the amount of beer consumed, the singer doesn't even start in the same key (and will probably change key 4 times along the way), no matter how many times you give him the obvious lead-in to the tune, and
2. It gives all his pals just the impetus they need to want to try their hand as well, and there's your presentation ruined.
I know it's all about giving your audience a good time and all that, but there are limits.