When I look back at Wrath dungeons (and to a lesser extent, post-launch Cata dungeons) and what made them successful, I don't think an "endless challenge" was on the top of my list.
For me it was overcoming the initial obstacle that posed a challenge, then going back after you've made some character progression and overpowering the dungeons. Going back at the end of the tier or end of expansion seeing the fruits of your labour and having a sense of accomplishment. And that's what made it fun and meaningful and made me want to spam dungeons; knowing how far you've come since the start. Things like pulling an entire group of mobs rather than a couple at a time, killing bosses faster, surviving mechanics that would have killed you before, being able to obtain achievements easier, killings things before they did a certain mechanic, etc. were all satisfying feelings. The dungeons were a physical manifestation of your character progress. Plus you were rewarded handsomely for it.
I think the main problem with WoD (and to a lesser extent, MoP) was that the initial obstacle was far too easy to overcome (exacerbated by design decisions such as ilvl inflation). As a result, the feeling of character progression (in dungeons at least) and subsequent empowerment was missing. When there never really was a challenge in the first place, and when there weren't any notable rewards (in WoD), people didn't return. And with no new post-launch dungeons to provide new challenges to overcome, things got stale fast. However in MoP, Heroic Scenarios filled in the void that was missing, and WoD's Mythic Dungeons attempted to address the reward issue.
Now in Legion, there is an obstacle that can never (or almost never) be overcome. Although your gear may get higher, the monster HP and damage just gets that much higher. So you are constantly pushed back to where you were at the start (relatively). Going in with that mindset leads it to being a very different experience than what Wrath and Cata offered. The feeling of progression and empowerment is diminished. This system not only devalues character progression (you'll most likely never really "overcome" the content), but it also devalues the gear rewards (the gear rewards will never help you really "overcome" the content as its difficulty effectively never ends).
We already have the Legion dungeon model on a smaller scale with raids (4 difficulties rather than more), and if there's one common theme with the feedback on raids at the moment it's that we have too many raid difficulties. The sense of progression and excitement is diluted when players run the raid on several difficulties, and the ilvl inflation devalues the gear.
Now I'm not going to sit here and say that every single player feels that way, but I do feel that there are other players out there that liked that feeling of progression and empowerment, rather than an endless scaling challenge mode (considering how few people actually did those). I suspect that there are people out there that like the feeling of "completing" the content then going back and overpowering it, rather than something open-ended that can never really be "complete". Then you've got to remember that these Challenge Dungeons are beyond Mythic difficulty; they are premade and therefore not a feature that will be done by LFD players. So I suspect that many people will simply be shut out from this feature.
Do you think that Legion dungeons are really an endgame solution for everybody or are (yet another) feature for the top few % of players? Is it fair to assume that most of the playerbase will not even consider Legion Challenge Dungeons as an endgame feature for themselves? What will Legion offer for the rest of playerbase at 110?