You claim you would be content and then go on to show you would not be content.
The regression is clear in your previous statement: "Of course, that will still leave you needing to engage the target of the new use...". You regress to the beginning of the power in order to rectify the option of "choose a different target". This becomes an infinite regression until the paladin choose the only REAL option in your opinion, engage.
Of course you can, you can change targets once per round. You have satisfied one of the two options: changing targets. In essence, challenging a new target always satisfies one condition of the ability for the turn it is used.
And that would be the clearest indication of your interpretation's problem. You leave off half the options in the first turn the ability is used.
If you allow DC to be set at the end of turn, you are giving Divine Challenge a big power boost. It can now put an opponent in a serious dilemma, where it has to either face an opportunity attack or take automatic divine damage.
Yes it is a bit of a boost to the Paladin's Challenge. However it is not quite as powerful as you make it out to be. The target could choose to Shift away from the rogue and then charge the paladin or he could decide to go defensive and see if the paladin backs up his challenge.If you allow DC to be set at the end of turn, you are giving Divine Challenge a big power boost. It can now put an opponent in a serious dilemma, where it has to either face an opportunity attack or take automatic divine damage.
Take this example, Pal has used his move, and his standard action kills his orc. He then puts a DC with a minor action on the gnoll that is in melee with the rogue several spaces away. Now it is the gnolls turn. If he continues to fight the rogue, he takes damage, with is close to an attack damage for CHA paladins. If he moves to face the paladin, he has to take an opportunity attack by the rogue.
Now you may consider this perfectly acceptable in your campaign, and I saw more power to ya. Just realize this makes DC a lot more controlling, not just a minor difference.
If you allow DC to be set at the end of turn, you are giving Divine Challenge a big power boost. It can now put an opponent in a serious dilemma, where it has to either face an opportunity attack or take automatic divine damage.
Take this example, Pal has used his move, and his standard action kills his orc. He then puts a DC with a minor action on the gnoll that is in melee with the rogue several spaces away. Now it is the gnolls turn. If he continues to fight the rogue, he takes damage, with is close to an attack damage for CHA paladins. If he moves to face the paladin, he has to take an opportunity attack by the rogue.
Now you may consider this perfectly acceptable in your campaign, and I saw more power to ya. Just realize this makes DC a lot more controlling, not just a minor difference.
True, you can only be marked by one enemy, but the challenge doesn't go away, only the Marked status was changed.
This actually helps clarify my thinking around Piercing Smite and marking. If you distinguish that a mark and a divine challenge are two different things, now attacks like Enfeebling Strike and Holy Strike make much more sense, especially after throwing out a Piercing Smite in a group.
The only question this leaves in my mind is how marking works between the likes of a fighter and a paladin. My first read through things leads me to believe that you cannot mark a target already marked - which makes things a tad difficult if the fighter and paladin in close proxmity and engaged on the same set of creatures.