When Arrow debuted on the CW Network in 2012 it was very clear early on that the creators were developing a dark and gritty corner of the DC Universe. Ironically enough, another show was premiering on Nickelodeon that same year; The Legend of Korra, sequel to the extremely popular animated series Avatar: The Last Airbender, also introduced a newer, grittier tone to its universe, culminating in the truly menacing season one villain, Amon.
Amon was a waterbender whose father taught him the outlawed technique of bloodbending -- essentially taking control of the blood in another's body and manipulating them at your will. Season One of
Korra saw Amon creating the Equalists Movement and using this ability to strip the power of other benders in an attempt to wipe out all benders and create an equal playing field for all of humanity. He was an intimidating villain that psychologically exposed the arrogant avatar, instilling a deep sense of fear in her before she ultimately got the upper hand, as all heroes do.
Everything about Amon would fit perfectly into the Arrowverse: his demeanor, motive, costume, personality, and especially his power. In LoK, Amon created a movement against the bending community which quickly gathered momentum and grew more powerful as the season continued. This plot would also work nicely the world they've created in the Arrowverse as metahumans have just been introduced and are beginning to get noticed by the greater public. It is natural for those without powers to be scared or intimidated by those who are now gifted, and, given the right push/leadership, these vulnerable people could become reckless and dangerous.
The beauty of the conflict that Amon would cause is that it is so real and can be likened and compared to the animosity aimed at any minority group (much like the Inhumans on
Agents of SHIELD or the X-Men). An anti-metahuman movement, or they could keep the cleaner "Equalists Movement", would raise the stakes for both Arrow and The Flash and allow for more crossover events but, in doing so, creating a new dynamic as Oliver and Barry would now be representing two oppsoing groups. Maybe instead of blindly fighting for his friend, Oliver believes some of what Amon is preaching, as most metahumas have caused major problems so far on
The Flash. This would create a divide between the heroes and their teams, it would create animosity between friends, and it would set up a political and moral conflict that can't be solved with an arrow or by running really fast. The psychological affect that he has on his enemies can be explored on
Arrow, while his powers and skills can be showcased on, the more supernatural friendly,
The Flash. Ultimately, he would challenge our protagonists psychologically and sociologically rather than physically, forcing them to find an alternate way to defeat him, reminiscent of the Joker -- but unlike the Joker, he would have clear motives.
The difference between this and
AoS and X-Men, though, is that this is an underground movement led by a deranged metahuman, himself, rather than a controlling, or scared, government, or government agency. Amon is essentially waging a war against his own people. This is a very conflicting plotpoint and would allow the show to delve into his intriguing past to learn how and why he has come to such an extremes. This eventual revelation, though, is what leads to his inevitable downfall as, like in
LoK, Amon's true nature is revealed to his followers who now believe that they've been rallying around a lie and the Equalists Movement falls.
As far as his power-set goes, his original powers could be kept, allowing him to control the blood in one's body, which would allow him to go up against other metahumans like The Flash. Or, they could also make subtle changes that would manifest in him only having the ability to take others' powers. Obviously there would have to be a pseudo-scientific explanation, but those aren't hard to come by in the comic book world. He is an above-average fighter which would allow him to hold his own against Oliver as he attempts to recruit him to the Equalists, and his well-trained followers would allow him to carry out his plans even while seeing resistance from Team Arrow, much like Ra's al Ghul and his League of Assassins.
He even has a kick-ass slogan: I am the solution.
Unfortunately, this is obviously something that will absolutely never happen,
unless someone writes a fanfic. It's definitely fun to think about, though, and is in my top five list of crossovers I would love to see.