I too have ideas for improving the ET Arcade…
Thinking on any unlocks or rewards aspect – I suppose (hypothetically) it’d be better to have it challenge based and be once or twice a month. If things (or all unlockable content) is presented up front - I think that makes players feel an impulsion to grind like they did with the Sniper Missions just to get to Mastery Level 20 - just to get it over with. But that could also apply to people that get the game later when most of all of the challenges or (groups?) of ETs have already been set/released.
The freedom of choosing targets aspect would be intact, and it might be a higher number and include specific kill methods. Maybe like a theme. 
Which is similar to some of the batches of ETs with specific restrictions or kill methods.