I do like the challenge but I do not like it when the game is just forcing you to exploit game mechanics, like zone transition for example in order to win the battles. The main problem is that sometimes (and it's chance based) game puts you into a situation when no matter what you do or how you still going to die. Simple examples when you get aggro from a group of enemies which (group) has both high dps and a lot of different type of controllers. So basically your health gets debuffed, you get poisoned, you get rooted, you get stunned and finally you die. Trying to tank the hell out of your character is still not panacea... cause you do have a lot of meanings to avoid or mitigate mechanical, but by far not so much to avoid elemental, poison, etc. That's when playing on normal.
When you play on easy then majority of fights which were fine on normal now become too easy and those occasions when fights were too hard now become managable, so you can complete the game but without enough of challenge. No challenge - no fun.
There should be meanings to make game both challenging but not to the point when you have to abuse game mechanics. Maybe HP pool should be increased. Maybe there should be more control over battlefield, like if you are stealthy you should be able to pick enemies from a group one by one, somehow luring them out. Maybe crowd control/debuffing abilities should be somehow nerfed...