That is a nice idea, Kee, but how do we determine if a story meets the criteria of having beginning middle end and character arcs when it is developed piecemeal over a long time? Or if the author never finishes it? We're no better off than we are now and would potentially annoy readers who specifically came here for long-form.
Take an example: I'm working on a trilogy, possibly quadrilogy. When I started, it was going to be a one-off. Then I added a second chapter and liked where it was heading. On the surface, these two parts of the series are just sex. Nothing clever. Nothing special. Nothing characterish. But in the third chapter, the protagonist is beginning to develop an arc which explains her behaviour and (hopefully) brings it to some kind of fitting conclusion (although I would probably leave it—at least in some way—open-ended so readers can take the story forward in their heads, or I could add an 'origins' prequel if there was enough demand, or continue it in future).
So far, I've put each chapter in a different category and linked them as a series, because then people who camp in any of the particular categories can enjoy the individual chapters, which increases my exposure, but if readers want to know more, they can dive either side and read the rest. Or not.
When it's done, if it goes the way I'm thinking, it could well be a "novel" as per your definition. So I could move it and lose my category assignments which signpost what each one is about (and meaning I'd have to write other stories in those categories to work towards Omnium, but that's a side quest). But overall it'll be, what, 15K words? Maybe 20K? Is that a novel? A novella? A long short story? Does it qualify? Who decides? A story of that length could be split into two to comply with our 10K per submission limit. If I've put a 15k piece in Novels, what's to stop others doing the same? Can two parts of that length be a novel? Someone who comes here specifically to read longer works and who sits patiently waiting for authors to write in this category, might then be pissed off that it short-changed them compared to 100-chapter epics like Techgoddess is penning.
Although there are arguments for keeping it, and I'm still on the fence, no matter which way we slice this, the Novels category is an anomaly. It's difficult to justify its value when there are now better tools available (category, series link, plus "novel" tag at minimum) to connect readers with relevant content.