Hmm... I think the biggest obstacle to this is actually a technical one; many powers behave differently in PvP than they do in PvE, necessitating the separation between the two into distinct zones.
The switch you propose could be fun, but if my understanding of the mechanics involved is correct, it would be an absolute nightmare to code, if it were possible at all without rewriting most of the game.
"A soft answer turneth away wrath. Once wrath is looking the other way, shoot it in the head." Seven Habits of Highly Effective Pirates
MA Arcs: #12285, "Small Fears", #106553, "Trollbane", #12669, "How to Survive a Robot Uprising"
Sadly, we're kinda stuck as is. The good news is that there IS a place you can go to duel in an open environment.
Warburg.
It's what it's there for.
You can't spell Slaughter without laughter
All your gonna do is just farm behemoths anyways.
My thoughts on November 30.
The arena has never hindered my RP.
Hmm, I don't know what to say, really.
I was in WoW for about three days, (Bored the heck out of me... No one in that game wants to team.) and I have experienced their dueling. Kind of fun, actually... Besides the Nightmare to code, some people just don't want PvP in their PvE zones. (Sad, I know...)
Since it's me, I don't mind... But before they add this, they must add walking! 
It would be kind of convenient to be able to select "Duel" when you right-click a player, WoW style. And is it powers reactly differently in PvE and PvP areas or vs. Npc or PCs?
Anyway, if you try not to think of the Arena maps as "This is part of the Arena" in think of it like being in a regular mission map, you might find some of what you're asking for there.
Personally, I don't RP and PvP at the same time much. Typing during a fight is just another way of making it easy for the enemy.
Arc ID: 475246, "Bringing a Lord to Power"
"I'm only a simple man trying to cling to my tomorrow. Every day. By any means necessary."
-Caldwell B. Cladwell
[ QUOTE ]
It would be kind of convenient to be able to select "Duel" when you right-click a player, WoW style. And is it powers reactly differently in PvE and PvP areas or vs. Npc or PCs?
[/ QUOTE ]
The latter, I think. Could be wrong, wouldn't be a first. 
Hold on...
Brain just shut off on me...
I type when PVPing all the time, it's great! then again, I use a lot of Fear, and I can green-circle shadow punch while I type >.>
You can't spell Slaughter without laughter
All your gonna do is just farm behemoths anyways.
My thoughts on November 30.
I am a bit new to the forums, themselves, so pardon this entry if it has been broached/asked before...
Comics from all brands are riddled with instances wherein a hero, for one reason or another, clashes in battle with another hero, though one (or both) may be deemed somewhat "borderline" when it comes to the hero label.
Oftentimes, however, both are legitimate heroes in their own right and, also oftentimes, the fight is simply based on mistaken identity or some other confused plotline. Other times the fight may be caused due to a character's personal agenda or priorities (say, Namor vs. a ton of characters...).
Based on this history of hero on hero violence, I wonder sometimes why heroes (or villains) don't have a simple way to duel each other in CoX like many, if not most, MMOs do.
Yes, I realize that there is an arena available for "dueling," but the simple act of getting together to fight at an arena pretty much turns the event INTO a duel in itself and completely puts the kibosh on any decent RP oriented event since the fight's location becomes so...dull.
I would personally love to have a situation wherein a hero in Kings Row is confronted by another hero while roofhopping and patrolling the streets. OOC whispers are exchanged, duel is begun, RP flourishes.
Most dueling systems have a way for players to give up, if desired, and no experience penalty for doing so or losing. The fight would be 100% voluntary and would not affect the surrounding zone or players at all (heck, a third party could take over to "help" after one player concedes).
I don't see an issue with this and would probably be more inclined to participate in such an event instead of an arena one (truthfully, how many are using them?). Who wouldn't want to be able to freely move around within a known zone instead of an enclosed room while fighting (flying high into the sky to fight Superman style or rushing for a zone exit to escape)?
Such events would be conducive to RP and helpful to those players who like to RP "grey" or "anti" heroes ("You there! Put down that gun!"). Being able to duel on the fly would likely be something that many non-RPers would also like.
Such fights would also enable individuals on different teams "square off" with invidividuals from another team, which is also a very common situation with DC and Marvel (sometimes both at once) comic stories.
As a variation on this line, other games (namely Tabula Rasa, for one) actually has a way to flag a group to fight another group, which is also fine for other types of fights.
To sum it up, while I do appreciate the existance of the arenas and while the fight club was an added variation, neither are even remotely true to any "PvP" type element within comics, themselves, and, ironically, I feel this is one area that RP (at the very least) could flourish within the PvP elements within the CoX universe.