This is probably my first reply/post in this forum despite lurking since it first opened to us backers. I just feel very passionately about this topic and want to put my two cents in.
I personally think it should depend on the context of the game. There should definitely be fall damage, but how much is the question. I vaguely remember seeing that there will be different arenas with different themes to them and this is the crucial part. If the "theme" of the arena is modern or old time warfare, then there should be a fair amount of fall damage to try to keep things realistic. However if the game ends up taking a more futuristic approach, then the fall damage should be significantly lessened due to the possibility of exoskeleton technology allowing humans to fall from greater heights.
In the latter case, I'm not sure whether you should spawn with this modifier or have to acquire it in the arena, but that is a different story altogether.