This is something I've also been hoping they include. Santa Monica has created a very intricate combat system, unfortunately it can be difficult to appreciate when there is too much fighting at once.
1 vs. 1 would be great. I envision a closed in stage with no items, no health fountains, just pure brutality.
Yeah like you and Hughes81 mentioned, I think a mode where it's just you and your enemy with no magic weapons, health fountains etc would work the best...
And I like the idea of having spectators as well! GOW is one of them games I could actually watch 2 people fight it out and enjoy it, it's so cinematic.