This is a wonderful little game. The concept and execution is extremely concise but the thing that really sealed the deal for me was noticing the escalating difficulty by making the paddles shrink.
Excellent. My favorite implementation of Pong is PLBM Pong from the DOS days: you can make the ball crawl at first and speed up gradually until it's all frantic jiggling of the paddles. Much fun've been had in the two-player mode.
You could in fact do likewise: let the player choose the initial parameters and the speed of change. Maybe with preset difficulty tiers if high scores are kept.