http://www.warcry.com/articles/view/interviews/6773-Five-Years-of-Warcraft-Speaking-With-Blizzards-Rob-Pardo.2
Blizzard's Vice President of Game Design, Rob Pardo, admits Arenas were a mistake.
I thought his take on it was pretty interesting. I found this link over on paladin schmaladin.
I'd go ahead and read the whole interview, it's pretty good, but the 2nd or 3rd question on the page I linked is the arena one. (which is the 2nd page.)