As long as it was distinctly seperate from the storyline, otherwise people might get confused.
You know what would be cool? A KH game based entirely on tournaments, where every character that ever picked up a weapon in the series would be playable. It would basically be like the tournaments in Olympic Coliseum, but you could create your own teams, either stick with Sora, Donald, and Goofy, or mix and match with Yuffie, Axel, and Mickey, or Riku, Sephiroth, and Mulan (seriously I'm just picking random names out of my head, but you get the idea). Kind of like those people who use cheat codes to make characters fight each other throughout KH2, only this would be official and you could save your progress. Characters like Xemnas and Sephiroth would have to be unlocked, because let's face it, if you played as Sephiroth there'd be no challenge at all! The object of the game would be to defeat all the other teams and win the Cup!
It would probably be a lot of work on the part of the creators to make fighting styles for every single character, but it would be so worth it!