Many fights I end up using almost every spell slot and avery hit point I've got, which is ok for 'balanced' mode but not for story mode.
Feel free to comment but please do not start questioning my play style or make it about whether or not I am doing things wrong, because my very point is that on the balanced and story mode there should be room for mistakes and sub-optimal play. Have to say this in advance because of previous experience in chat.
Well, as soon as you mention difficulty your playstyle is obviously subject nr1. More precisely your party composition. It would be nice if you could share it. This will make the difficulty vary a lot for a specific encounter.
You mentioned you had fights where you used all your spell slots within a single fight and manage to loose it which is very surprising. Any fight where spell slots get spammed would automatically become won basically. Even in Act 2. So very surprised to hear that. Unless you just hapenned to pick up characters which make this statement invalid.
In my coop gameplay we play on normal so we can roleplay more freely, not always go for the most optimum choices etc. Sometimes we roll in face first without thinking cause "justice" and any npc screaming" hurry" means we actually hurry. We definitely make mistakes, even on purpose. And it still works thanks to the abundance of scrolls, potions etc.
I have custom Dark urge Paladin of vengence + Shadowheart in my party + Gale and Karlach. I have to recognise a huge chunk of the damage comes from Karlach + the paladin just obliterating everything they see and the fact they both dodge a lot of enemy attacks(Karlach struggles with it at first, but she can get a perk and items allowing her to get a respectable AC but that's a question of character build more than anything, so won't go into that).
We never had more than 1 reload per fight apart from two specific fights which we had to restart 2 times.
1) A fight in Act 2 against an invisible demon. We had 1 spell to discover insibile creatures, he rolled a saving throw. He has 2 actions. On the 2nd action he becomes invisible. So good lucke killing that thing. We got quite lucky to kill him with what we were doing.
2) Nightsong fight. The boss just using a specific AOE spell on our asses when we were bunched up after the cinematic, pure pleasure. On 2nd reload he didn't use it and got nuked by a paladin on speed potion. 4 smites to his face, 2 criticals. At least it teached him respect I guess XD
Based on my spoiler example I would say some party builds might end up getting you into trouble in some very specific fights especially if you're not familliar with D&D. I'm having troubles to think of a party composition leading to me going on story mode instead of normal but I'm sure they exist( Any party not having some form of a melee specialist with double action from level 5 onwards will struggle in Act 2 to be honest). I'm assuming that's what might have hapenned in your case. Which on one hand is a shame to have story choices impact combat so heavily but on the other you can respec your characters in camp at any time for 100 gold I believe.
So if you want to have a specific character but just need a warior or something like that this solves the issue.
While I understand what you are trying to convey my point is I didn't have those difficulties despite not having a try-hard approach at all( for now :P ) so it's more about the fact some classes types seem just necessary in a party if you want to have it the easy way. And not as much about the global balance of the game. Quite normal in a class -based system.
Good lucke out there !