The big problem here is if Larian listens to you and those like you who played game through 3-4 times and then adjust the game difficulty to your liking the game will pretty much become impossibly difficult for the rest of the players.
Careful, I used that reasonable logic recently and a troll had a field day with it.
But you're absolutely right.. the early parts of the game on the lower difficulty settings need to be tuned for the new player, not the tester who has gone through the content umpteen times.
Hard: For experienced players only. Monsters have above average health, they have increased amount of special abilities and their attacks are quite powerful. Using crafting and battle tactics is adviced. At this level monsters drop better loot.
Nightmare: For hardcore players who look for extreme challenge. Monsters have 2x of health and use all the powerful abilities from the arsenal similar to the player at a given level and their atracks are 2x stronger than normal. Using crafting and battle tactics is mandatory. At this level monsters drop the best loot available in game but every mistake you make will cost your a wipe.
However, this part I disagree with (the loot improvements, specifically). The problem is I choose harder difficulty settings because I'm seeking a more challenging experience. When you reward players for using it with better loot, two things happen:
1) The better loot makes the game easier, which is exactly the opposite of the reason I'm playing that difficulty setting.
2) Every player feels they need to play on that difficulty setting to get the "true" rewards, and then complaints about the difficulty end up resulting in nerfs.
I just want a difficulty setting that makes the game more difficult, where the "reward" is more challenging gameplay for people who enjoy challenges.