Blizzard says it will be coming back at a later date.
When Blizzard finds something that works, the company tends not to mess with the formula. The 'Diablo' games are a fine example - they've been tweaked in different ways but the core game remains the same. 'Diablo III' is going to be much the same way, at launch at least. The expansion brings a few new things into the mix, but one of the big additions has been shelved for now.
The games player vs player mode is something Blizzard just isn't happy with yet. "The PvP game and systems aren’t yet living up to our standards," says 'Diablo III' director Jay Wilson. "We’ve made the difficult decision to hold back the PvP Arena system and release it in a patch following the game’s launch."
Wilson assures fans that when the PvP system is ready to go, it's going to be incredibly strong, feature multiple maps, player progression and more.
Source: Diablo III Official Blog