So what happens when a player with it set on "easy" meets another player that has it set on "hard" and they are both in the same RES/NAV?
Easy actually - the matchmaker simply wouldn't instance them together.
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Personally, I'm not sure difficulty levels are the answer though. AI difficulty simply needs to make sense contextually - an intense combat zone or HAZ RES should be hard (perhaps even need a wing), while routine trade runs should adjust depending on whether the space being transited is policed, an anarchy, in a state of war or unrest etc.
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The AI doesn't need to simply be harder.....dangerous.....for ED to succeed. It needs to be playable by a wide range of playstyles and player ability to succeed......to appeal to a wide audience that is. ED desn't need to be.....shouldn't be.....simply Dark Souls in space to suit the hardcore crowd. Unforgiving maybe, but not so difficult that some simply can't cope. Nor should it be a simple turkey shoot either. But at least the latter us playable by all, while the former.......well, not so much.
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The 13 year old I read of recently, upset that he now can't cope with the difficulty and he feels like he's wasted his limited money. The grandfather I read of last night who doesn't now have the reflexes etc, but loves playing this game with his grandson. All those casuals who simply want to immerse themselves in the galaxy without having to fight for survival at every turn. At least the pre-2.1 AI was playable for all - even if the hardcore crowd found it too easy, it was still playable and only needed tweaking. Now we'll have to see how the new AI performs with reduced chance of Engineer modules of course, but some players need to get over themselves - ED will be a far better place if it caters to a wide playerbase and playstyles.....and player ability. Adaptive AI might be a part of that for all I know, I'll wait and see what Frontier come up with.