This is a good idea! A problem, however, is that once you punch them in to the fire and have already gotten 1-2 hits on them, they will die of the fire not you. Maybe make it so the fire only does damage if you are standing inside the fire? This forces you to keep hitting them in, not just hit them once and they will immediately die.
Another problem is that players can just burn all their items in the fire, making the game much to hard for the people that didn't manage to get to the cornucopia before the refill or didn't want to because they were gonna check the chests in the morning or something. The person holding the cornucopia can just burn any extra armour and weapons they get easily! I know they can already do this at the forge, but to go there and get rid of all your items, it takes multiple trips (as only 1 person). I know because I have done it. It took me 3 trips to the forge to get rid of all the chest items and also took most of the day. It was quite boring, and I didn't encounter any resistance.
In addition, hackers with aimbot and longdistance hitting can easily just punch people into the fire. Maybe this can be fixed when we get some more anti cheating plugins, but for now hackers have a much bigger advantage with this idea.
I generally like the idea of a fire, but it would make it to hard for the players that can't hold the cornucopia the first minute of the chest refill. Sorry if I sound mean, but it's atleast slightly true.