I've seen this concept not do well in other places, and these are my observations as to why:
1. The majority of a programming forum's membership is made up of transients who come for help in the moment, don't venture far from their own posts, are somewhat initimidated by the whole forum community, its mysterious culture and the often ill-defined rules that most members try to live by and enforce, sometimes too enthusiastically. These people with immature but developing skills aren't typically interested in hanging out and participating in "fun activities" that might bring them embarrassment and ridicule.
2. The next largest group of members are less transient, but come and go as they please, maybe for a short time, maybe for several years. The attraction of the forum community to them is the satisfaction they feel in helping others and little else. They don't develop significant friendships among other members, and the exitence of rivalries born even of friendly competition would be a reason to move on. They either don't have egos that are fueled by crushing others in competition, or they've learned that that part of their ego isn't welcome in a forum culture created to help, nurture, and mentor others.
3. Some number of people participating in a programming challenge, the number varying from 1 (never 0) to as many as there are participating, think: the current challenge sucks, the winners might as well be chosen randomly because there is never any justification given for a winner's selection, nothing is learned from the challenge entries or the results, and the deadline is always extended to give the lazy and weak minded extra time. The number of disgruntled and disenfranchised participants grows with the number of challenges until at some number of challenges less than ten, usually ~5, the Programming Challenge implodes, because most of the participants (all 8 of them) have quietly wandered as far from it as possible, some maybe leaving the forum because of it.
I know that my observations are incredibly negative and cynical, but I don't mean to say that the idea is bad or that it isn't worth trying. I only want you to be aware that there are significant challenges to making this idea an event that is successful, "fun," educational, self-sustaining, and one in which more find pleasure than their own personal version of the opposite, whatever that is.
And if you feel strongly about the idea and want to pursue it further, be prepared to get it going and lead it - maybe forever (which may not be long) - and send the idea in a PM to "Admin," because I'm not convinced that the all-powerful wizard hiding behind the curtain actually ever reads the topics in this area (or any other?).