A Digression/Objection to above:
But power for power's sake doesn't really mean anything in the strong sense. Raw power has nothing to it but its existence. The narrative of the power is what means something, as it affects other existences and causes differences.
Continuing there, the narrative of the Elder Scrolls series (using your power as the dragonborn to fell great foes and save the lives of many, or re-establish guilds, etc., with most quests) is the only thing as far as I can tell that CAN mean something.
Progression without narrative is probably something like MapleStory, which is effectively absent any point but attaining power. I do not think I need to argue for most people to agree this has no point or meaning when you gain a level in this game, as there is no significance to said power.
More On-Topic (though the digression isn't truly off-topic):
I do think there is a place for difficulty settings, but I'm not sure the structure of this game could handle many "hard" difficulties that feel distinct. It strikes me that all that could happen would be boosting either the stats of enemies or the enemy count, unless lower difficulties would simply be deprived of abilities that enemies can cast.
I do personally have a problem with barring content to difficulty levels somewhat, but I suppose I could see hard modes being, say, a first crab battle where the crab matriarch spawns crablings and the crablings shoot bubbles at range to hurt the players (a new ability) but no stats on said crablings are different.
But there is a clear downside to this: every bit of content they put in a hard mode but not a "normal" mode is content many people won't be experiencing in any way be it from lack of skill or lack of desire to replay after picking normal.
I think it's pretty clear that we should be getting all content we can in every difficulty level to make it as impressive as possible the first time through the game, and there is a limit to making things hard or making things take forever to kill/kite in turn-based tactical RPGs.
TL;DR: You need to be really careful with difficulty levels and I do not see a particularly promising option for this particular type of game.
