Fort wars!
*insert awesomeness here*
I love the twin cities concept. Gladiator arenas are a wonderful idea, and should really get implemented at some point. Sadly, current dwarves would just get bad thoughts from witnessing death. If you really wanted to though, you could have a fatal sparring match occur; Build a big tower with a sparring area at the top, assign two dwarves to a squad, and let them duke it out. Height could be adjusted depending on how fatal you want it to be. First person to die or cancel sparring due to injury loses. This may even work in the next version; I think the dwarves will still toss each other around. By the by, double-posting is generally frowned upon here. Unless someone has posted after you, it's usually best to hit the modify button.
Not sure if it was answered or not (having difficulty searching through this massive thread):
If a dwarf reaches Legendary in a particular skill and then never uses it again, will the skill rust down to below Legendary and make the dwarf become subject to the Economy once again? As it is, there's a particular event that can make this scenario quite common - a Peasant goes Fey/Secretive and becomes a legendary Wood Crafter, a profession which is utterly useless in many fortresses (what with bones usually being plentiful enough to keep training Marksdwarves busy).
If I remember correctly, skill rust isn't exactly a loss of experience. It's more a temporary negative modifier to skill rolls. If you started that legendary dude crafting again, he would get back on the horse relatively quickly.