I had asked this at some time, too, because a comm sounded like a good idea to me, too. But some people didn't want it back then, so I'm fine with it. There definitiely are downsides to doing it in a comm which I can't deny, particularly not after various similar experiences as a mod (and the last remaining mod of a comm, too): comms tend to get more anonymous more easily, and might attract more people much quicker, which would take the personal feeling out of this challenge. I'm participating since over two years now and I must say this holds a special charm no community can match. Then, a community always needs some people in charge and being responsible - who end up with doing most of the work, while other volunteers just dwindle away, or don't feel compelled to join in with the hosting in the first place as everybody seems so well taken cared for anyway. Eventually, only a couple of people will remain who do the work, and finally, two or even just one will remain, get frustrated at having to do everything on their own, and eventually stop. Also, there are various similiar communities already out there, so there really isn't a point in just doing another one.
I can't speak for anybody else, of course, but personally, I don't think I'd continue to participate if this was a comm. I tried a couple of writing comms, but it remained always too anonymous for me as I'm not a person to interact and participate socially much, and get quickly isolated, or not integrated in the first place. WED is a refreshing alternative.

I actually drafted the idea for a story today, but I'm feeling a bit better, too. 98 words, and 16 for yesterday.
I'm already subscribing to you from the last time, but I don't get notifications either. It doesn't matter too much to me, though. I might forget to check in as I'm totally reliant on notifications, but if you don't mind editing me in if I miss a day it's fine for me, and I wouldn't want you to unlock your journal for this purpose. You've doubtlessly locked it for a reason, and won't all of your journal become public if you changed that? I don't know, though.
You could also create another journal just for the purpose of hosting the challenge with different privacy settings. I know people are doing this for similar purposes, when needing to regularly post public posts but prefer their journals to remain flocked.