Smoothing out the difficulty curve is definitely a good idea, instead of facerolling through "normal" and then hitting a brick wall as soon as you step into higher-end content.
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Honestly one of the games biggest flaws is that you play content that's hilariously easy you can get past it without paying attention or something that takes a guide for most people to understand, even ext (something people consider midcore) 90% of the people doing it will look at a guide first.
Even if it was something like the with the scale you'd take more damage, New mechs or harder variations of mechs would start to show up, slowly a less forgiving enrage It would make a pretty fun and replayable model that wouldn't likely be too difficult to do.
Ironically the only thing that's not asinine in Criterion were the corridors with the trash, which is proof they can design fun and different things if they try. And difficulty wise? It's literally what's people have been asking between lukewarm dungeons where you press one button and clear it anyway and challenging content where you have to wipe 100+ times on a single boss to progress.
Different tiers of difficulty are not an inherently bad idea but SE refuses to adress the core issue and that is boring job design. The massive gap between normal mode and hard mode is because of this. Jobs are by and large too easy to play so the only way SE has to create difficult encounters is to crank up the encounter difficulty to 11. It's the reason for the excessive body check fights, SE has no other recourse because they refuse the obvious solution: changing their job design philosophy.
I would seriously enjoy having something that is harder than your normal dungeons, but not as hard as criterion dungeons. The level we have in Ex trials is perfect, and doing that with dungeons is what I thought they would have done with variant/criterion, but they decided only savage raiders should access this. It's not that it can't be done with a coordinated group. It's just the level of coordination and the punishing body checks. Using the Wandering Minstrel, you could have retellings of the MSQ dungeons and create something like that with semi-decent rewards so it feels like I'm progressing my character doing them. Add some rare mounts in that, and you've got some serious continuous content. You can even add modifiers to the mob packs between bosses so you have to change up the usual strat to keep things interesting each week. Basically what I'm asking for is something like Mythic dungeons that WoW has. Just make harder versions of the MSQ dungeons.