Now, I think this is useless. Why waste resources and money on something that'll last a few minutes, you'll have to repair the robot too. Just give everyone in the audience a VR Device and simulate the same exact thing with contestants piloting the robots. This solves the limitations of these events. We have the technology to do so, so why don't we?
I feel like whether it is what we consider a real sport is irrelevant. We should focus on how likely it is that it will become popular and whether we think that it would be a waste of money (and whether other similar types of entertainment are a waste of money by extension). In terms of likelihood of popularisation we need to think of how impressive it would actually look and whether it is as impressive as competing forms of entertainment as well as the economic viability of it (not in terms of ethics, in terms of whether participants in the sport could turn a profit).
The people building the robots are payed for by sponsors and the sponsors get their money back from successful advertising. People paying to watch it get to see something awesome, and it would of probably been spent on something equally wasteful anyway. If it is economically viable and technologically possible, I can see no reason why it would be a bad thing.