I think its too small for that. I checked it out last night and the only idea I had was some sort of amphitheater. jmiller and a few others mentioned that the spawn area felt a bit cramped, so I'm not sure whether we are going to re-work the centre area or something. I don't have a massive problem with it, per se, but if you are in the middle you feel a bit surrounded by buildings with no idea where anything is. If the spawn block and surrounding blocks were flat, or raised, it would be possible to look around and see clearly where the bank, train station and shop are.
You're welcome to make one just outside spawn, and place a gravel road of some sort towards it. There's a bridge that leads to spawn, why don't you follow that down for 50 blocks or so and build an arena there?
I agree that it would be more convenient if it were actually inside the spawn though, but we're running out of space.
I would make a Spleef stadium but I need to be able to place bedrock blocks really. It also helps to have admin privileges to reset the layers in between Spleef games rather than manually place all the blocks. That's what's putting me off doing it. I have another project in mind though, so we'll see.