The first few seasons of tough enough were kinda alright. Very much like the ufc's ultimate fighter. Then they went with the smackdown version and the whole thing was basically like what NXT is today. Stupid challenges galore. Apart from the Angle and Puder thing the whole thing was bogus.
I believe the new tough enough should be a bit of a mix of both.
They could have the hopefuls train and live together, while making weekly appearances on raw or smackdown to build interest in the reality show.