Great discussion! My thought on the matter:
- Like many others, I don't like the difficulty levels. For me, they seem to be too artificial. It doesn't help that you are forced to choose difficulty before even playing the game ("am I good enough to play this on normal? Or maybe on hard? How should I know?!"), and I certainly don't like that this choice is usually made outside of the game - in menus and stuff.
- I think the easiest solution to difficulty and accessibility already exists - the cheat codes! They are relatively easy to implement (definitely easier than to rebalance the whole game), they could be fun on its own and they solve the problem of difficulty. This boss is too hard? You want to explore the setting and lore without having to deal with those pesky enemies? Just type in IDDQD or whatever and have a good time! Unfortunately, cheat codes nowadays are a long forgotten art, with microtransactions slowly taking their place.
- As far as the actual difficulty and balancing goes, I am a fan of in-game features or mechanics that serve as difficulty levels. There are different ways of doing so. One example would be Super Mario 3D World with its super tanooki suit (which is basically a cheat code, but in game).
Another way would be to provide the player with clearly overpowered stuff that he could choose to use or not - I remember having Thundergod Cid in Final Fantasy Tactics that could trivialize the game to certain extend if you use him. My favorite example would be (already mentioned) Dark Souls. It has so many ways of changing the difficulty in-game. For once, you could choose mage at the start - ranged combat is much more easier that melee brawl. Then you have the entire RPG system with stats and leveling - which by itself is essentially a difficulty picker. You could beat the game as level 1 character with starting weapon - but it's very hard. Or you could grind souls and overlevel the boss - trivializing the encounter. On top of that, there are plenty of exploits or overpowered stuff that you could use if you want to - to make the game easier or to achieve something without too much bother - and that's good! I don't think that the single player games should be overly balanced to begin with. Unbalanced or overpowered items could help with accessibility and make the game more fun. The biggest problem with all that though is that you have to communicate it to the player somehow - what choices could make the game easier and vice versa.
- About dynamic difficulty - maybe this is the future for certain games. I don't like the idea personally, but just as procedurally generated content, it has the potential of making things easier on the long run. That being said, the difficulty (or challenge) is part of the game - just as the story, or visuals, or combat system. And just like the story, or visuals, or combat, difficulty defines some games. And in those cases, hand crafted difficulty that challenges the player would always be the way. But for other games, that doesn't focus on challenge but on other stuff - yeah, dynamic difficulty would probably be a better solution. In fact, I wouldn't be surprised if this dynamic difficulty isn't already implemented in mobile gaming where one of the primary problems is retention of players.