The "Balanced" difficulty is INCREDIBLY UNbalanced. I have a level 5, well-balanced party, and I still get my shit kicked in 9 out of 10 times.
Yeah, it's not a problem of the game, I can tell you that.
If people are managing just fine in Tactician, you are just doing something poorly to have your ass kicked "on the regular" in "Balanced".
And Story mode remains an option, anyway.