I was once part of a group of writer-type friends who often played little word games with one another. One of the things we enjoyed most was when we were given a prompt to quickly write about - and I mean quick, it was very nearly a race. These two or three word phrases were chosen at random by one member of the group and the rest would find a creative way to use them in a piece of writing. What made it fun was seeing how the same phrase spurred so many different ideas.
A writing prompt can be used for nothing more than an exercise, a way to get the ideas coming and the creative juices flowing again. You may find that a writing prompt is the right chisel to break you out of the doldrums and just get you writing again. Who knows? It may lead to a bigger and better idea - one that ends up as a short story or even a novel. Writing prompts can be a valuable tool in generating ideas that can be used in many ways.
That's why I prefer to call it a writing challenge rather than a writing prompt. It is the challenge that we rise to meet, it isn't just a reaction to being poked and prompted.
Recently, I took a challenge to re-write some English poetry. I might have gone too far in re-writing Shakespeare. But it was a lot of fun and a good exercise in rhythm and meter. Parody is the highest form of flattery, isn't it?
You can find my cheeky version of Hamlet's Soliloquy here.