I think this issue has mainly to do with how the game progresses as you level.

The beggining is necessarily easy to get new players (potentially ones that have never played an MMO before) to learn the ropes. However, this sets the pace for the rest of the game.

Game difficulty, in FFXI particular, is hard to manage when the core game mechanics are so limited. First we have to think within the limits of the game itself and make suggestions, then think outside for potential future changes.

Working within these limits, here's a few examples of increasing game difficulty:

1. Increase Monster Level.
2. Make Battles with greater level differences more rewarding.

These are simple, first is probably the most simple, yet least rewarding. The second would encourage players to move from extremely rewarding, yet extremely easy content (Spamming easy leves) into potentially more difficult encounters (Fighting more difficult world monsters).

Now, if we look outside of current game mechanics we do do a few things as well:

One example being: Add interesting Monster behaviors.

The first is relatively large in scope but can be simplified. Monster behavior can include, movement, attacks, incapacitations etc.

But, the combination of all these ideas can contribute to potentially more difficult, and more importantly, more fun encounters.

For example, if we had a new Monster, that is meant to be fought by 8 level 50 characters. We can increase it's difficulty quite substantially. But, we then give the opportunity for players to then weaken the monster by incapacitating it several ways. Let's assume it has a giant horn used for dealing great damage to the tanks. Well, we can give the players the opportunity to break said horn, but they then risk getting impaled themselves. Thus this encounter then has DPS characters moving in and out of harms away delivering blows to the horn. Then, we can give the players the opportunity to bring the monster down quicker. Let us say the monster has a thick outter shell protecting a weak spot. Require the players to deal a certain amount of damage within a specified amount of time, and the shell is broken, exposing a soft underbelly for the players to attack. By doing this, we have created a mechanic for players to work together for a common goal. Then finally suppose this monster is fairly intelligent, and will use the surroundings to it's advantage. Perhaps it flees down into a cave, as the adventurers give chase, the monster suddenly turns around exposing them all to his horn. Or perhaps he leads the adventurers to a beach where he then proceeds to take a giant gulp of water and sprays it out at incredibly high pressure. The players will have to adapt quickly by interrupting slowing or stopping the monster to avoid being annialhated.

But, that aside, I agree the game needs to be more difficult, but it needs to add it by adding depth, not just a wall for players to smash their heads against.