I love this idea! Sort of like a really high-stakes obstacle course you pay to participate in.
QQ - would you have a maximum incapacitation count before they are "out"? Seeing as monsters won't coup de grace more than once (correct me if I'm wrong) within a short space of time, what's to stop someone from entering, dying over and over and over until they get to the end?
There have to be lose conditions other than permadeath, one would hope hahaha