Do you think the highest ranked chess players should get extra pieces?
Chess is a board game that's remained static since ancient times. There are very strict rules, and both sides have exactly identical capabilities. There are a ton of games out there like this, from board games, to first person shooters, to RTSes. In all of these games, the point and essence of the game boils down to pure competition, so that makes sense. Even in some of these "pure competition" games, RPG elements have crept in, like leveling or earning gear that's cooler (Not gonna name names, but these elements are present in everything from the very latest competitive shooters all the way back to the team v. team games that started it all). Why? I'd say it's because those RPG elements are fun, and they're a compelling reason to compete.
World of Warcraft is an RPG, where pure competition by itself is not at the central essence of the game. I would argue that getting more powerful and beating faces in as a result of your increased bad-assery is part of our core experience, along with lots of other RPG core elements. That doesn't mean that the environment isn't or can't be highly competitive. It certainly can be and often is. Nonetheless, as I mentioned in my prior post, if you want the closest approximation to "pure competition" in PvP that World of Warcraft offers, then you might want to keep your eyes open for the next Arena Pass realm to start.
The point is that challenge mode offers no progression so I fail to see how this fits in the rpg logic you guys are using.
For the record, it's my logic and personal opinion, not Blizzard's logic as a whole. And I already drew the distinction. Challenge Modes don't need to offer progression because they're not core gameplay, they're a niche pursuit. I would argue that PvP is core gameplay.