Now here's somebody I can actually relate to! Kudos to you, guy_at_the_store, for actually paying attention to the game you are spending 100+ hours playing, instead of mindlessly pulling a Leroy Jenkins each time you see an enemy then complaining that the game is too hard.
I love challenges. I was raised on the NES era of "Coin op" mentality, where a game isn't a game, unless it's an achievement to beat it, and I still believe that, if a game doesn't offer a challenge, it has fundamentally failed. That said, challenge should be optional, and that's where difficulty settings come in. But it's a delicate balancing act. Nobody wants difficulty that's delivered through cheap means, but at the same time, there's only so much you can do to create challenge with game AI. Good players are always going to be able to "Figure out" the loopholes in AI behavior. At the end of the day, a good "Difficult" game, means it demands the players focus. This is where my "High Risk" combat direction preference comes in. (Yes, I play Vanguard in Mass Effect 2). Even if you seemingly "Steamroll" over the opposition, you have to ask yourself, "Was it because I gave it my all, or was it because they were just stupid" and, a lot of the times, it's the later.
Difficulty in Skyrim needs to really hammer that home. It needs to punish every hit you take harshly. If you become a prodigy of the block mechanics, it might seem easy, but consider your focus level on an encounter, whether you took a hit or not, came out with 1% hp or 100% HP doesn't matter, what matters is that engagement hooked you from start to finish, and never felt dull.
But Elder Scrolls games have one thing working against them, and that's their open nature. When you give the player so many options, it's incredibly difficult to keep the situation equally difficulty, and rewarding across all styles of play, and balancing the game is nothing short of a nightmare, perhaps even impossible without dedicated post-release support.