I think the primary issue here is game design. In about 98% of all cases, higher difficulty means that, instead of Generic Bad Guy requiring n bullets to kill, he now requires n x 3 bullets to kill. Playerguy, however, now can only take n / 3 bullets before dying.
Some games manage this better. Portal, for instance, has deliberately-designed levels which give gamers several different ways to proceed, and once someone originally new to the game has played through once and become used to the gameplay, they can go back through again and find better ways to proceed. Left4Dead brings us the AI Director, who will ramp up/down the challenge and item placement depending on how well the players are doing.
My idea of a "perfect" game experience is as follows:
- Easy mode is just that, easy mode. Non-boss enemies are pushovers, levels are linear, weapons/usable items are simple and have easy-to-understand effects, objectives are clear and blatantly pointed out. Boss enemies have glaring weaknesses and recognizable patterns. This is the training ground for the newbie, the rank amateur, someone who's basically playing this kind of game for the first time- we hold them by the hand, let them explore to their hearts' contentment, get them used to how things work. Beating this mode, however, only gives a partial ending sequence and incentive to attempt the next difficulty level for more fun and greater closure.
- Normal mode is where the challenge starts, meant for those who've played games before and have a notion of what's going on, but are new to this particular game (or genre). Levels will open up a bit, allowing for two or three routes to a clear destination, and enemies will begin to exploit these openings for a greater challenge. Weapons and items gain a bit of complexity, allowing for greater variety in problem-solving. Puzzles may be used, usually for optional benefits, and their solutions are reasonably understandable and not esoteric or based on luck. Choices are introduced, but their consequences are generally clear and not game-breaking. Beating this gives the player a good ending sequence, but also cues them in that the next difficulty level has even more to see and do.
- Hard mode is for the experienced, for those who have gotten bored with Normal mode or who are coming into the game with good knowledge of how things work. Wider levels with a multitude of approaches and routes provide much greater freedom in gameplay, and challenging AI will also take advantage of this. Equipment is varied and has a perceivable impact on gameplay, requiring thought on what to use given the current situation. Puzzles will be challenging and lead to greater rewards (puzzles required to advance through the game must remain relatively simple, as some people just don't fare well with them), and there will be a number of choices to make which, while not making the game unfinishable, will impact progress and open/close off certain later options (again, we want these consequences to be relatively understandable, and not "you can't go to City X because you insulted Random City X Citizen back in Map 4"). Boss battles are now challenging and require varied tactics to overcome.
- Legendary mode (to crib the term from Halo) is for the hardcore, the people who want to show off the skills they've learned in the game. All battles are now a challenge, every step forward must be earned, and success rides as much on an ability to choose the "where" and "how" of battle as on twitch reflexes. Previous puzzles and choices, while still familiar, will include extra levels of difficulty and complexity, and it is possible to close off (or open up) entire areas of the game with your choices. The rewards of this, however, are much grander- bragging rights, cheat/trick codes, extra items or personalization options, better ending sequences where the results of your efforts are made clear. Beat Legendary mode and you truly "own" the game.
A design and programming nightmare? Sure is. Achievable? Yes, if only by a select few developers with the time and genius. Worth the effort? Absolutely.