This made me laugh...hard! :rofl:
I was really just trying to depict how I imagine a warrior's mindset and lifestyle to be. Their lives would be harsh and often filled with grim consequences when they fail at what they do. Their existence would be fraught with peirls and struggles to survive, and weakness would not be forgiven kindly. But through it all, they would be driven by honor and would seek to prove to themselves that they are the mightiest, the strongest, the most skillful and most powerful of all the warriors in all the land, even if that means fighting in some run-down, slum of an arena. The setting of the challenge wouldn't matter...it would be the challenge that was important, and in fact, the grittier the place where the battle takes place the better it would be for the barbaric warriors of Skyrim.
But if skilled warriors often tested themselves by fighting to the death against other skilled warriors, there would be very few skilled warriors left.
http://www.gamesas.com/index.php?/topic/1153456-imperial-city-arena-entertainment-or-genocide/ about Imperial City's arena, but if you don't want to read it I'll just post an excerpt.
Each Hero rank combatant required the death of at the very least 2187 participants, and there are at very least 3 heroes and one champion (requiring 6561 deaths minimum) on the yellow team. Again, this is assuming ideal progression. Since matches between high rank combatants seem to happen fairly often (you can get a match set up whenever you want), I think we're looking at a wholesale slaughter on the scale of hundreds of thousands or millions per year.
Assuming Tamriel has a population similar to Medieval Europe, death in the arena would be pretty much the #1 cause of death in Cyrodill every year, unless there's a plague, famine, or war.
I don't think this is realistic, or even remotely believable, personally