There will be hard content that only a small number of the population will beat before the next update is released - and that's the way to it. I remember reading Yoshi answering a question in an interview or something about content (this was originally about 1.x but I don't believe his vision has changed all that much). He said something like "If the content/battle testers in the office can beat it, then it's too easy, as the players will beat it".. Something along those lines at least..

The ability to choose your difficulty is going to exist.
Yes the rewards will reflect the difficulty.
No the "casuals" players should not feel entitled to "rare" or "hard to obtain" items for beating easy content.
Yes items are "rare" because only a minority are able to obtain them.
It does motivate / encourage players (hardcore or casual) to continue playing the game, if there is something to do.

In between a patch, what did you do when you were done with the content? I know all I did was sit in Ul'dah helping random people with AF quests and what not.. It is boring when there is nothing to strive for. Some casual players expect that the regular players should be held back because these casual players are not able to achieve what regulars do.

To be honest, I see more casual players standing around in Ul'dah complaining about not completing content, when the "hardcore" players are out there doing it.

As a casual player: You can not expect to hold a regular player back, waiting for content to be released because they breezed through it, when you have barely even touched it. You cannot complete hard content or obtain the rarer gear because you do not earn it.

This "I am entitled to everything a player who plays 10x as much as me" mentality can shove it. I consider myself a "regular" player, there are many more hardcore then me - however if the content was any easier, even me as a "regular" player would be sitting on 7 relics.