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.
True, I didn't elaborate, but what I meant by using this as a small NG+ possibility is that you already explored the game as much as you could, and now you have the option to do a "hardcore" run, where you must focus everything in being the strongest possible, just to be able to beat the game in the new mode.
Actually, since this will always be just an optional configuration, they could enable it freely and maybe just warn the player something like: "Not recommended for the first playthrough. This mode is for veterans of the game who wants to face really hard combat, experimenting with the strongest builds and tactics they can muster for every ecounter, you may not be able to fully enjoy other non-combat aspects of the game in this mode".