Ive seen the same pvp npc in Battle Of Immortals (much like RO). Ur idea is much the same as the game's.
But yah, it would be nice to call just 1 person to a pvp room instead of the whole guild ganging 1 person inside.
Also u forgot to mention, that all names that are online must be in the npc n u can just click on that name n whisper for a pvp challenge.
But i think there is a downside for putting every names that are online in the npc, probably the time it takes to create an npc i think :)