Personally i really enjoy the hard fights. Its causing me to tread carefully everywhere, treating the world as a potentially dangerous place. It makes the world come alive around me. It makes me think of how i should approach the next area.
Take the spidercave in the blighted village for instance, i got so caught up in the world (being terrified of spiders) that i was moving very slowly thought that and had shivers run up and down my spine. Yes, i died 50 times, and had to replay quite a few hours, but im absolutely enjoying it.
I do think, however that the level cap should be at least 5 for the first act. Some of the monsters in the underdark for instance just instantly wipes half my party without chance of retaliation. I also hit the cap about halfway through the act, which feels waaay too early.
