It isn't a matter of BGS difficulty mechanics. It's the industry as a whole because the mechanic BGS uses is the same in almost any game regardless of where in the world it is made.
The one major exception I know of is Halo. Bungie made difficulty based on enemy party composition, not health and damage given/taken.Or rather the health an damage given/taken varied due to the stronger enemy party composition at higher difficulty not because of a simple multiplier. This is how difficulty should always work but I doubt that we'll see it become a new standard since Halo is fairly old now. What's really silly is that Halo proved that this is a very popular way to manage difficulty and Halo has been very successful partly because of this method, yet other companies haven't adopted it.
At least BGS includes an experience multiplier that's tied to difficulty along with the health and damage given/taken multiplier.
Actually, the percentage slider in earlier games like Morrowind and Oblivion worked much better than the five fixed settings because the slider allowed players to fine tune the difficulty even if it was only damage given/taken. Bringing that method back would be better than what we have in the newer games.
Ideally, BGS and other developers would adopt Bungie's approach with the original Halo and make difficulty based on enemy party composition. That would automatically handle damage given/taken as well as experience awarded. It's more work, but it works far better. I won't hold out any hope that it will happen due to the long time that it could have but hasn't, though.
I guess one other example would be Silent Hill where higher difficulty didn't just make enemies stronger but also made puzzles much more difficult. I still didn't like the simple damage sponge for enemies, although the puzzle variation was great. It's another approach that would be better than what we have right now, at least.