I like the idea
You should certainly go for it, but something wasn't clear - will you have to click on the arrows to make moves or can you just us the keys on the keyboard, instead of having to practice your reflexes with the mouse? You should be able to use both ways... Sorry but you said "keypad" when describing the controls and I'm not a computer expert so "keypad" can mean the arrows on the screen or whatever.
Making the difficulty rise when you reach a next level would be great, instead of making a bunch of equally easy levels only with diffrent backgrounds. Levels could have humoristic bosses who dance very well and are very hard to follow or beat (checkpoint before them, of course) and the last boss could be the guy organising the tournament. Original, aye? I'm just imagining things, though, I don't know how hard making these things can get... Best wishes!