There is a certain type of Battlecraft levequest that already allows that, where it's basically a time attack mode that you have an unlimited wave of enemies rushing you, and you have to kill a certain number before the time runs out. It wasn't popular and so SE abandoned it after level 50.

The Ul'dah Colleseum will never be used for PvP because it would otherwise result in players idling around it (players already do but if PvP was available there it would be even worse, and on servers like Balmung, it would literally crash the game) - it's a narrative only area connected to the GLA/PLD class/Job quests, and at least one battle connected to the Hildibrand quests takes place there. Hence PvP was instead given it's own special area seperate from the main areas (the Wolves' Den).