well, the 'nightmare' setting of old actually was ridiculous and 100% unplayable to the non-deranged, imo. so i dont really want that. its more the case that if a game has 5 settings, ie. roughly one each side of the standard easy/medium/hard, then i expect to be properly punished on the hardest — like, oops i need a new monitor because this one has a fucking fist stuck in it, punished. but still somewhere well short of the ragequit-inducing experience that can result if every enemy variable is just dumbly ramped up. i mean, continually getting through each section only by the skin of your teeth so that youre left a quivering mass of frayed nerves — but in a good way.
take Far Cry 4, for example. the hardest fortresses in FC4 were bullshit hard even when you were fairly well kitted out, which was great. and whilst it was easy enough to build yourself up with small-fry missions, that crazy-hard experience was there to be had. i was often down to my last bullet and inches from death, having no other choice but to string together a bunch of unlikely knife kills and impossible hero shit. thats what i live for in an FPS — those moments you wish you were on Twitch because the world needs to know about what just happened. in Wolfenstein, too many times when things are threatening to get like that i run into health and ammo galore. it could pretty much be fixed with less stuff lying around, which makes me think it wasnt properly (or at all) play-tested on the Uber setting. i suspect its much more likely the devs fell into the habit of making blind tweaks and erring on the side of overcompensation re powerups.
and yes, i agree that these games have gotten harder. a lot of the shit that would quickly get you killed IRL has been factored in. and i have few major qualms with the AI in FPSs these days. enemies routinely seek cover and outflank, and they do a lot more higher level stuff like 'listening' to exploit your vulnerability during reloads. all good stuff. its much harder to 'game the game' now by exploiting sloppy AI quirks. theres a lot that needs improvement, of course, but i do appreciate that we have entered a phase of diminished returns where the bare minimum of 'must haves' have mostly been nailed down, and gains will be more incremental from now on.
what i really want from a maximum difficulty setting is a sense of achievement. i want it to mean something that you could even complete it, period. which means, beyond avoiding excessive powerups, a game should, ideally, not overly reward knowledge gained through repetition nor excessive caution. did you prevail because you died a lot and slowly learnt which baddie was around what corner? was it because the game made it feasible to be absurdly cautious and spend 100 trigger pulls effectively brute-forcing the hitbox of a stupidly long range headshot with a pistol? or was it straight up awesomeness? its a delicate balance.