According to Wilson, after developing and playtesting the addition, the developers found challenges in balancing matches with Diablo 3's loot system's augmentations, and playtesters didn't seem to want to spend more than a few hours with Team Deathmach.
"So, our core problem is that our Team Deathmatch mode doesn't feel like a great addition to Diablo 3," Wilson wrote. "It's not up to the quality that Blizzard gamers expect or that we feel you deserve, and it doesn't really fit with our goals for the rest of the game. The question now is what are we going to do about it?"
Blizzard will still bring PvP dueling to Diablo 3 with patch 1.0.7, which is expected to arrive "sometime after the new year," but the multiplayer arena is shelved indefinitely in favor of developing something that works better.
"For now, though, we're going to first be looking at new modes that play up to the strengths of the character classes, focus on objectives beyond just defeating other players, and possibly even integrate PvE elements and rewards," he wrote.