As Obsi said, under Exe's guidance, we set up a similar area in the old Frontier land. It was designed as a completely PvP area. Strangely though, no-one built in there for that purpose, so I used it for the Treasure Hunt.
I can see no harm in setting up an area on Frontier. It will need to be signed well, perhaps with something like an Endstone wall that is very visible and out of place. If it becomes popular, we may need things like challenges etc added.
As to where, a corner area will allow it to be expanded when updates occur, and it allows less of there being a central area with two flanks. A square area will have many flanks in all areas.