Problem is, it is very hard to make a difficulty system that is just "perfect" for everybody.
Take this game for example, you've got 3 static difficulty settings.
Now, you have to balance these for 3 different classes. This isn't that hard because you know how those classes play, but still.
Then you have to ensure they are doable even with the built in random elements of this game. A normal mode that is extremely hard because of bad luck is bad design for example, so you have to try to find some middle ground. This is much harder, because, how can you play for random elements at the start of a game?
Then comes the hardest: everybody plays differently. If I play on hard, should I be forced to avoid all mobs, clean entire islands before fighting and then carefully pick the weakest fights? Some people want a challenge without min/maxing everything, others want a challenge with min/maxing. Both players could pick hard, for who do you balance Hard mode?
Difficulty should never be a static and unchangeable setting at the start. It should (in reasonable ways) dynamically adapt to you and your situation. I understand your AI mechanics suggestion, but I think that is one of the hardest things to do in games. As a Mage in Crossworlds my ideal settings would've been Normal at the start, Hard in the middle and Impossible in the end, to remain at the same difficulty.
I think the best option would be picking a difficulty option at the start that takes into account your class ( So that every class has the same difficulty begin and end game ), and one that slightly scales depending on performance. If you min/max and get all the medals super early, the game should be made slightly harder then if you don't, to remain at the same level of difficulty.
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