The Gladiator's Arena was originally in Guild Wars Beta and was planned to be a PvP arena where players could challenge each other in 1v1, found in Battle Isles on the easternmost island. It was due to be released with the coming of Guild Wars Factions. It was removed during development, however, and its inclusion in the game is yet to be seen.
It is speculated that Hero Battles grew out of what was going to become the Gladiator's Arena. This can also be inferred because the Guild Wars Factions manual shows the Gladiator's Arena outpost (only in the manual, not the game) at the same location as the Hero Battles outpost used to be.