Of course. If a conversation/argument/flamewar is going nowhere but down, then a mod should lock it and tell the parties to cool it. Anyone would expect you to.
A lot of times the steam is coming only from highly-opinionated or fact-oriented posts. One time Phaser and I were going six pages strong on whether Dolby 7.1 surround sound in "Call of Duty 2" really made a difference over Dolby 5.1 and I nearly had an emotional breakdown. Still, I didn't have any personal problem with it because, hey, we're just talking about facts, preference and balancing them with budgets and time. In those cases, they should be allowed to persist because it really lets the two posters get a good idea of one another and often times, respect is born. I'm really glad a mod didn't think it was just a fight and closed it, because it did look rather harsh (no curses thanks to the swear-filter).