I agree, but it really needs to be a special ocasion for something like that to go by. But if you base your whole performance and character on challenging others, then those special moments are going to be seldom. Not to mention if you are payed to perform magic, and all you can do is try to challenge audience to catch you. And if you do that, eventually they will, and that is not a pleasant moment.
If you present yourself and your magic as warm, entertaining and fun experience, even if you flash or mess up, audience is more likely to forgive you or not even mention it to you. But if you present your magic as a challenge, and your audience catch you, they will not let you forget it.
Ah, I think we're talking about the same thing here, but in different language!
I'd like to make a distinction between two ways of presenting a challenge. Firstly, there is the challenge with your persona. This is akin to Houdini's escape act, where your whole character is one who "can't be beaten" by the audience. This kind of challenge has to be handled very carefully, and could definitely alienate an audience. The other kind is verbally challenging your audience (a la Greg Wilson, Dai Vernon, Daryl and others), where you make a point of saying things like, "You've got two more chances to catch me!" etc. This kind of challenge is the one I was talking about in my previous post, and I believe that just because you say those kind of things, it doesn't make the audience feel stupid, or even genuinely challenged. In the same way, just because Derren Brown says jokingly in his haunted deck effect, "If the spirits are with us...", the audience don't think that he's really suggesting that the cards are moving under some phantom hand. It's all about the character and the non-verbals, and, as we all know, the actual words coming out of your mouth are almost insignificant in communication.
So, what I mean by this, is that you can tell an audience you want them to catch you out, tell them you're psychic, or even tell them you hate them, but without necessarily communicating those messages.