I have to agree that the harder difficulties should be more realistic than just increasing stats. One such realistic way to increase difficulty would be to increase the number of npcs.
More enemies in one spot, harder for an assassin to sneak attack them all.
More enemies in one spot, harder for the warrior to defeat them all.
More enemies in one spot, harder for the mage to defeat them all.
More enemies means more loot, i.e. better rewards.
More enemies is a more realistic form of difficulty, and correctly rewards people with better rewards in the form of more loot. It is already an elegant solution.
Not true.... i have a lvl49 mage, and lvl35 rogue. my assassin can stealth kill a room of people without being detected (seriously, no idea how they can be so blind to the point that i walk infront of them they still not able to see me). for my mage, conjuration + illusion = overpowred.
to whoever say "turn down the difficulty", i don't think it is necessary because i finished the game (1 or 2 guild quest + 0 or 1 main quest) about 4 times. however as the OP mention that if i do have any attempt to tank enemy (even i have 500 to 600 armors) normal bandit still can kill me with few power attack, and quite often when fighting a big group of enemy, the main solution to fight against enemy is to exploit their AI which is as OP point out that it is stupid.
a proper balance game i want is that enemy do something, i have some skill to counter it. skill can be play style or character ability, not like kiting enemy