I see the current difficulty level as somewhere between what I call Hard/Insane.
Like you said, expectations.
I see the current difficulty between normal and hard, not even remotely close to what insane would actually be.
I base my own expectations on the many popular CRPGs like Baldur's Gate, Icewind Dale and more recently, Pillars of Eternity.
If you look at Pillars of Eternity, it's the kind of difficulty layers that RPGs should aim for:
Story Time - Story Time mode is for players who are more interested in exploration and story development than the challenge of combat. While Story Time is active, the enemy composition of battles is the same as Normal difficulty, but the game mechanics are biased in the player's favor. Additionally, the party can carry an unlimited number of Camping Supplies.
Easy - The Easy difficulty requires minimal micromanagement an easily forgives mistakes in combat. It is STRONGLY RECOMMENDED for those who are new or recently-returning to real-time party-based RPGs.
Normal - The Normal difficulty requires strategy and efficiency, but forgives a few mistakes in combat. It is NOT recommended for newcomers to real-time party-based RPGs!
Hard - The Hard difficulty is suited for Infinity Engine veterans who are looking for a challenge. Survival requires micromanagement and optimization of stats through items, spells and abilities.
Path of the Damned - In Path of the Damned difficulty, enemies receive a bonus to most stats and encounters have many more enemies. Warning: this option can't be changed in-game! It is only intended for players who want the most punishing encounters!
Which is why I see the current Classic being more between Normal and Hard.
After having played Pillars of Eternity in Normal, Hard and Path of the Damned, I can easily say that Normal was not a walk in the park in itself.
If anything, Divinity Original Sin 2 should have more than just 3 difficulties. People don't want to play Explorer mode because they see it as having no challenge, which is fine, but the moment they get any challenge at higher difficulty, complain that it's too hard. So having that extra difficulty between classic and explorer would probably be for the best. Hell, they could make Explorer that "easy" difficulty and make a "Story" mode for "very easy".
