As much as I'd like to have better difficulty curve, in this community it is something really hard to do. That's why we should think about solutions which don't prevent players from experiencing the story, while avoiding the nerf bat.

It might sound evil, but I would go with story for free and rewards for a little bit of work. By this I mean difficulty level of casual who reads tooltips and is able to use the skills in correct sequence. Let's say 70% of optimal performance.

Right now content is being nerfed to the ground and that's the easy way out. I think it would be better to keep the difficulty up while giving players meaningful rewards for it.

Another option would be to have two difficulties of dungeons. One that would for example give you 200% of exp/loot/tomes etc. and one nerfed. To prevent queue times, players who select the harder one could be put into the easy one while keeping the increasesd rewards. Of course this would need harsher penalty for leaving the duties.