To be frank, I think this verse is not well understood, and the usual interpretation simplistic and a bit nonsensical. Like how it supposedly means that nobody is able to match the perfection of the language or content of the Qur'an.
This interpretation makes little sense, in my opinion, because it sets up the rules of this 'challenge' to be entirely subjective. You could easily dismiss any attempt, based purely on personal taste, by saying that any contender's entry is not as beautiful, not as perfect, etc. That makes the challenge pointless since it can never be settled objectively.
Furthermore, I am pretty sure that someone could produce a fake verse, with some inspiration from the actual Quranic ayah, which, to someone not well versed in the Qur'an, would be difficult to distinguish from a true ayat. Has he then beaten the challenge?
Finally, "call your witnesses" - this would again be highly dependent on which witnesses are actually called, if the winner of the challenge were to be determined based purely on aesthetics.
So yeah, I don't like the usual interpretations people make of this verse and I cringe a little when Muslims bring it up, within this context, as the main evidence of why the Qur'an is true revelation.
A much better understanding of this verse, in my opinion, (and I don't remember the source for this but believe it is one of the known tafseers) is that it challenged the people of the (saws) Prophet's time, to show from where he got this scripture, if not from God. Since the Prophet (saws) was illiterate and unlearned, it is obvious that he could not have produced it himself, so the only other option, if not from God, is that he took it from somewhere else. A work with the stature of the Qur'an would not be unknown in the Arabic speaking world if it, or anything similar to it, had already existed. So that, I believe is the real challenge this verse puts forth.