A lot of people say this when they are challenging someone else:

I'll verse you.

I thought this sentence was grammatically correct. However one day my computer teacher got into an argument with us about it. He whipped out a dictionary and began searching the word "verse" and told us the definition and said that saying "verse" as in challenging is wrong. It should be used as in Home verses Guest. Is that right? If it is, why does the majority say it this way?