In my mind the difficulties should represent these:
Easy: don't really care about combat
Normal: with a build focused on things other than combat, you can complete the game without much problem.
Hard: you must focus on combat or get your ass kicked.
Since the game is not like this right now, this new difficulty would be what "hard" was supposed to be. You have to make an optimal combat build to have a shot at it.
I agree that combat could be even rougher on the hardest difficulty, but I don't agree that the ultimate difficulty should force you to build your characters purely for combat. Granted, this is a highly combat-oriented game, but it is still an rpg adventure and I think those aspects are just as important. I would love for a game of this type to finally implement difficulty variations in the rpg aspects. A typical scenario in an rpg is that you can either resolve a situation by combat or by talking your way past it. On normal difficulty this could present an average fight, or require a mid-level skill rank in Charisma or whatever is appropriate. On hard, this should present a tough fight, or require that you've seriously devoted points into your Charisma/speech skill to be able to overcome such challenges. Or even make the non-hostile resolution much more complex than a simple skill check.
Sure, D:OS doesn't really have that many of these situations and the ones you are presented with are often very easy to resolve without combat. While the fun combat often makes you rather take the fight than talk your way past it. But my whole point is that I don't like the idea of higher difficulties forcing the player to play the game less as an rpg and more as a straight action game. This is way too common in today's rpg's.
