This issue with the game is not difficulty imo, it's the texture (things are too smooth). Even competitors are roughly similar (I don't die in regular wow dungeons either).
Adding challenges won't make the regular MMO player better, you'll only get a better pool by narrowing it. Many players don't want to sit down and fail for the hour they have to give the game.
I don't think generally making the game harder solves anything for anyone long term. As it isn't the core of the issue.
Healers can be valuable without a substantive increase in difficulty (meaning they feel important in regular content), content can gain variability without a large increase in difficulty, etc, etc.
I see this sentiment and I don't think they are hitting the nail on the head with difficulty. They want to feel alive again because each expansion their content loses flavors and ingredients, left with a basic oatmeal. They say if I had more ghost peppers I'd feel alive again, and maybe partially true- but they're making a terrible oatmeal doing that. Just add the actual dang ingredients back (and improve them).
It's not the difficulty but the texture of the game. Some texture may add minor challenges, but it wasn't the challenge that was making it more fun.
In the vast majority of games I almost never ever die, except for perhaps FromSoft's stuff. I don't only enjoy FromSoft's games. Death is not the key to happiness. Perhaps you weren't saying that, but honestly bad players biff it all the time in normal FFXIV content. You can almost always win without them. So really the only challenge to add then is failing the dungeon, and I think that would be bad to touch on very much if at all. In other words if challenge was a resource to allocate like exp on a sphere grid, we don't need more exp we need a better allotment of the same exp. It's not the quantity but quality, so you would read more 'exp' in challenge is the ghost pepper solution of feeling alive eating plain oatmeal. I'm saying with minimal changes to challenge you'd have a much better experience if it wasn't all so smooth (streamlined, optimized, homogenized, whatever catchy word you want to use).
Anyway game can be slightly harder and benefit but it will be through adding texture (depth) and not specifically just challenge (like harder hitting fight isn't the solution).