I am a very loud advocate of difficulty settings in games.
However, the importance of challenge is beyond personal enjoyment. In most games, it can be core to the experience, the adhesive that holds every underlying mechanic together. Without it, things can quickly fall apart.
This is true even on easy settings. A misconception about an easy mode is that it’s for people who don’t want to try. This can be true, every game is different. But generally, the point of an easy mode isn’t to remove all challenge, but to give the player a challenge appropriate to their level of comfort and skill. A hard mode might simply be impossible for them rather than challenging.

This is because some degree of challenge is integral to the identity of a video game, and many mechanics rely on it, regardless of genre. The Outer Worlds is popular right now, it is an RPG all about player choice. Unfortunately, it lacks any meaningful challenge, even on harder difficulties.
This leads to enemies going down in a few shots, regardless of skill point distribution and upgrades. This invalidates any player choice in selecting combat skills as they aren’t needed, and it also severely undermines the loot and weapon upgrade system.
I adore Death Stranding, yet it still struggles on this front. Even on the hardest difficulty, the challenge is lacking. Notably, the BT’s, the ghostly apparitions that plague the game’s world. They are integral to the plot, theme, setting, and gameplay.

They are supposed to inspire fear and unease, and the game expects you to plan your routes around or through them depending on the circumstances, gear, and risk. However, they are incredibly easy to sneak by and equally as trivial to fight. This stings the games overall feel a great deal, the BT’s cease to be scary and it impacts the planning and cargo game as you don’t really need to avoid nor prepare for them.
When State Of Decay 2 first released, I wouldn’t have recommended it to anyone. It is a zombie survival game where you have to take care of a community by scavenging for supplies. Perma-death is one of its flagship features. It was so lacking in the challenge department that the entire game fell apart.
None of the actions you took had any meaning as it was nearly impossible to lose a survivor. The zombies existed purely as something to whack on or shoot at. There was never any threat to going on a scavenging run and even contracting the zombie plague was dealt with easily. However, it was eventually updated with additional settings that tweaked the entire game.

Playing it
In Fallout the difficulty settings are done well enough, but for the sake of an example, you can use VATS to pause time and target limbs. If you cripple a leg the foe moves slower. If the enemy went down quickly, would you ever need to cripple a leg?
Dying Light is challenging but has no punishment for death. The terrifying nighttime in which the fast mutant zombies are on the hunt loses its fear factor when you realize nothing significant happens when you get caught.

Even despite all of this, it is very possible to enjoy any games that lack challenge and you aren’t wrong for doing so. We should still push for proper implementation of game mechanics, however. Enjoying something that is broken, does not devalue your joy. The object in question still should not be broken.
This is especially true on higher difficulties, or games that commit the sin of not offering the choice of settings in the first place. Humans are programmed to take the path of least resistance. Our love of entertainment doesn’t always compute with this. Unless given the right incentive, we will often take an easier route, even if it devalues our own enjoyment.
If a game wants the player to take advantage of a weapon crafting system, it has to poke and prod us with the incentive to do so. If we can get by just fine without it, we probably will and that feature was a waste of development time.

If a game wants to reward stealth, sneaking has to feel worthwhile compared to killing everything. The older Assassins Creed games were terrible about this. It was far easier and less time-consuming to kill every guard in the area head-on than to sneak around and be an actual assassin.
If a game wants to reward teamwork but never requires players to employ it, then players simply won’t. A lot of modern MMO games are glorified single-player titles with a chat room. Most of the content can be done by a single person without ever feeling the need to team up with another.

Generally, this all applies easy modes as well. Some exceptions are games that are about power fantasy, but you usually know that going in. The Outer Worlds and Death Stranding brought this to the forefront of my mind, but it has been an issue in the industry for a while.
When done right, challenge elevates the game mechanics in ways that incentivize players to take advantage of them on all difficulty settings. While the settings themselves provide an appropriate range of
That doesn’t mean you can’t enjoy games that didn’t get it right. Death Stranding is one of my favorite games of this year. Yet I’d love it that much more if it was more if it offered me a satisfying challenge.
It is becoming increasingly common for developers to toss game balance to the back burner when it really should be a high priority. Otherwise, all that time spent on those fancy mechanics, systems, and ideas all go to waste.
I talk about Difficulty Settings a lot. Check out my piece on The True Impact of Challenge in Gaming and The Anatomy of Challenge in Gaming.