That's the thing though... they didn't do that. Normal in Knack is still waaaaay too difficult to be reasonable for young children, and can be legitimately frustrating at times even for a competent player. You still get peace'd out in 1 or 2 hits, checkpoints are still surprisingly far between, encounters are still frequently arranged to screw with the player and whiffing a single attack will still nearly always result in Knack sustaining a hit (of which 2 will kill him). The game may be more difficult on Hard, but the fundamental gameplay and considerations are all present and accounted for on the Normal difficulty too. It's not like Normal allows you to run around mashing buttons and bypassing the game's general system, and then the game becomes this diverse experience by upping the difficulty. The game is bad because it's bland, insanely repetitive, poorly arranged, and a whole lot of other negatives... "too easy by default" is not one of them, and additional difficulty is only of use to anyone that likes the game enough to actually want to play a lot more of it. Same as pretty much every other game in existence.
I know the game catches a good amount of shit here on GAF, but I think it's actually good that it does... because I honestly believe most people will hate their time with it, and if LTTP threads are only populated by a small minority that enjoyed it against all odds, then it creates a skewed perception that the game is a "hidden gem" that people are missing out on and should probably pay money to try. That's what I did, and I regret it entirely, lol.