Speaking about VR paintball/ lasertag - thats pretty obvious conception and there are a lot of implementations on the market.
Just to be clear I wasn't speaking about a VR paintball/lasertag game, simply the idea of an arena that large :P
I was thinking of an outdoor arena that large that could accommodate large groups of people. The arena itself could have certain permanent base points for navigation and tracking purposes but overall would be modular physically (moving of objects such as structures/rooms/etc.) and mapped virtually based on the type of game wanted to be played. So you could host an FPS type game on it if you wanted to, but also you could transform it into a virtual obstacle course that looks like it's on the moon. You could setup a murder mystery that has clues all over the arena. You could setup a rescue the princess game where one side has to storm the castle. You could create games with mechanics where people have to enter physical buildings to avoid cluster strikes.
There's so many opportunities with AR and VR that are yet to be explored, and like you said it's not really financially feasible to do something like this, but that's my dream.