Maybe not even a free-roaming thing, but how about a PVP arena? For example...
1. Arena searches for matches that are in your skill/ level range. For example, level 8 will be matched with levels 5-11 (leeway of 3 levels either side)
2. Deadric artefacts are not allowed. (Wabbajacking somebody would just be silly. Fun. But silly)
3. Players candecide whether to wager on their own match or a match made by others. Wagers can include coins or items (not quest/ Daedric/ unique items)
4. No enchanted weapons
5. Players can watch other player's matches real-time by watching from the crowds. You can sit with other players and discuss matches and such. Obviously no combat in the stands.
6. No enchanted followers/ followers of any kind.
7. Players rank up by earning one 'point' per victory. Increasing number of points levels up the player to the rank of Champion. (Max rank)
So what do you think of this idea? I know it's a real long shot, but I'd love to see this come true.