Could work, but its probably not high on Bethesda's list of priorities. They teased us with the Arena in Oblivion, so who knows?
Nah it's not gonna happen.
For one, BGS only makes single player experiences and nothing else. They take great pride in delivering the best quality single player experience they can, and multiplayer would only get in the way.
Secondly, the new engine probably wouldn't even support such a system anyway, as it has never been a focus in TES.
Third, ZeniMax Online was created specifically to create online games (they have access to Bethesda's IPs). More importantly MMORPGs, and rumor has it still their one in development is TES MMO.
My own personal opinion on it (I have been saying this since Oblivion launched) is that arena deathmatch and two player co-op would have been great. But alas, that is something BGS will not and never do. It's not really a bad deal either, considering I would hold the single player experience as more important anyways. I'm more excited for actual improvements in Skyrim (combat/graphics/content) because of the new engine rather than any non-existent hope for multiplayer.