Well, for one, when terrarium fell out of use last time, very few people did, and most of the time that was for 1v1s or memories (I think it was pure with the old terrarium). People just went to kitpvp.
As for the suggestions,
No. The terrarium has a purpose - that purpose is an easily accessible arena for people to fight. While an added-on dungeon would be great (I reallllllllly liked old terrarium's dungeon; it was REALLY hard and discouraged players going in there... at least me :P, but it still provided a means of escape), the terrarium needs to stay a terrarium. Hunting for kills is unnecessarily boring because
people don't fight when they're losing . They'll just run/hide and escape, making PvP unprofitable and a waste of time.
EDIT: Besides, we have 2 escape routes already. You seemed to focus on that a bit in your posts.