The problem is when you include an easy mode, you normally don't have some types of challenges in the game. Take God of War, when you go for "hard mode" all that changes is the hit point pools. It's challenging only in the most limited concept of challenging and in the easy mode you kill gobs of enemies and quickly go though the world, in hard mode you stand around slowly attacking the same AI doing the same things for longer. What most gamers like is close to one hit kills with challenging foes and environment not to feel like you are attacking a brick wall with a ice pick.

Now if you add enemies to hard mode, require some sort of finishing move, or add extra ambushes that's different. But when you build a game for easy mode, and tack on pointless challenges it just feels cheap.

PS: One option would be to have extended death, where you "kill" enemies but they keep attacking for a few seconds but if you walk away they quickly die. It makes the world feel more real and adds more challenge without slowing down the pace of the action.

What makes you think that Easy mode was what set the bar and Hard mode just had hitpoints increased? Perhaps Hard mode was what they intended the game to be like and for Easy they just lowered the hit point totals.

For all the people complaining about how horrible Hard mode usually is - what should it be? Everyone seems to say - they just make the enemies have more hit points, or add more of them, or make them aim better. What do you want hard mode to be?

I would think that to make "easy mode", first you tune your game for the hardest setting. Then, you start progressively removing obstacles, turning up player advantages, turning down enemy advantages, etc for your easier settings.

Simple tweaks to a game like increasing hit point pools can make the game difficult in meaningful ways if there is additional depth available in the game. If an enemy has 100 hitpoints instead of 10 hitpoints, you may have to learn to anticipate and successfully dodge attacks instead of just ignoring them. Perhaps, God of War developers could have increased the damage output of the enemies or increased the frequency of their attacks instead of increasing their resilience.

However, I agree that I prefer when they add smarter AI rather than just increasing the enemies damage output or increasing the amount of damage they can sustain. In a game like God of War, the depth of the AI in general may be small to begin with, and there may not be much they can do to improve it. I imagine with God of War, the enemies have attack patterns, hit points and damage values for attacks with a very basic AI that begins attacking the player's character once they are within range or sight.

Upping the challenge in a game may actually make the game less fun, in that in order to overcome the added challenge, you have to take the game at a slower pace or resort to exploiting deficiencies in game mechanics that diminish the immersion in the game.