I most often hear this phrase associated with the following:
1) Removing censorship, typically for US versions.
Riiiight, because the Witcher is SO much more immersive when you can see the nipples on the sex cards. And Indigo Prophecy/Fahrenheit totally makes more sense when I play out the sex scene with Tiffany by pressing up on the analog stick/mouse or I get to SEE Carla bone a dead guy. If you want to see tits in game, just cop to it. I'll admit it right now, I like to see tits in games because they are that much more satisfying when I have to work for it instead of just typing "tits" in Google. Don't spew some bullshit about how it completes your gaming experience, though.
2) Demanding Japanese voice tracks for US versions when you don't understand Japanese.
A lot of English voice tracks are awful for Japanese games, and I suspect the reason is this: they heard the Japanese voice track and are trying to match the inflections and rhythm of the original so they don't have to hire another voice acting director or redo the lip sync. For this reason, and this reason alone, I can understand wanting Japanese voice tracks. It's hard to tell how crappy that Japanese track also is when you don't understand, but forced dialogue in English is easy to pick out. But if you think that you will somehow get some sort of deeper understanding by listening to gibberish while reading the exact same words that the other voice track will play, you are mistaken. If anything, it's less immersive. I turn off subtitles whenever possible because it engages me into the game and keeps me from reading ahead and skipping ahead. I doubt any of the games creators intended for that.
Let me be clear: I'm not saying you shouldn't want options in your games or that the above are unreasonable demands. It just annoys me when people claim that these things help produce the "intended" gaming experience. Just admit you're a perverted Japanophile! It's not like you're alone.
As for the difficulty issue, which I think may be the actual topic of this thread, I don't know I just kind of skimmed past the posts to quickly get to my point, there are difficulty settings where a game just falls apart and is not fun. I have played games on easy to get through them and regretted it every time. I don't think you need to beat games at the highest difficulty settings in order to prove your status as a gamer, but there are definitely times when you only notice the design of an encounter when you push yourself to the limit.