I don't see that as a problem, because as I said, to me, difficulty serves no purpose other than to engage people of different levels of skill/talent. The increased engagement as such is the motivation to take it on, because a lower level would just bore you but that level doesn't. Thus, different difficulties provide value - people who would be bored otherwise are being entertained by the game. What destroys value is trying to get people to play on a level they do not find "right" for them, be it too high or too low. And the issue here is probably more that people who prefer a higher difficulty level have to do too much content on a lower difficulty level than they'd prefer.
That aside: I do think the single-player comparison is perfectly valid in that regard. A person who plays Divinity Original Sin on Tactician Mode likely doesn't give a rats ass if someone out there is playing it on Explorer, because the experience of the other doesn't impact their own. In an MMO, the same applies - if one group does a boss on hard mode and another on easy mode, the experience of one group does not impact the experience of the other.
And yes, you share the same domain - both of those groups will end up idling in Idyllshire. And that is the point where people want difficulty to come with higher rewards, out of the desire to flaunt their tokens of esteem when the two groups meet in order to elevate their own ego. Their experience is completely independent, but this social aspect is why "effort must meet reward" and I don't think it's a positive one that deserves to be supported. Effort is the wrong word by the way, because everyone has different capabilities and it will take some people far more effort than others to achieve the same result as others - a colorblind person will have far more trouble dodging some colored circles than people with normal sight. "Performance" is what you mean.