I think the Hero's Challenge is a good idea. Problem for me, like a lot of others, is that for endgame players it's just pressing auto instead of actual battle.
I get that it still needs to be accessible to earlier players though - so my proposal is simply to add some sort of difficulty options, basically in the same way rift has.
So if we had "Normal" which is what we already had, then we could have "Expert" which would be the same but probably feature Karnheim enemies for example. Having a forced hero in 1 slot could actually make some of those fights a bit challenging.
Even if an Expert Mode gave the same amount of rewards, I think it would overall be a good feature. Though maybe consider how having only 1 attempt per day would work there.