The difficulty I'm talking about was in the full game too. The problem is that it is a New Game+ type of deal. The way it was set up in the demo made it look like ammo would be very scarce and enemies would be tough. How the full game plays is more like ammo is very plentiful and you upgrade your guns (further) to make up the difference of higher difficulties. (Enemies turned out to be rather uninteresting too, but that's a different story.) To put it simply, the game just doesn't play like it did in that demo.
Not sure how the new difficulty will work though.