I think it's designed to be that way, the player need to get more upgrade points before getting to higher difficulties : easy allow the player to see what's coming by being able to finish the level, normal is for farm, hard is a big challenge and I don't even know if insane is winable without cheating (AKA using the fight freeze bug)
That's not how the devs have said they they wanted difficulty to be. From them talking about how they wanted difficulty to be, this is what I think to have remembered:
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Easy is for getting the game experience without much difficulty. (For RTS beginners or players who don't want much difficulty.)
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Medium is for being accessable, giving some challenge but not too much. (For those who want to have a fight, but not too much.)
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Hard is for challenge, most experienced players will find hard difficulty challenging. (For players who like their games to not be too easy.)
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Insane is for those who need more challenge than hard difficulty can provide. (For players who are a tiny bit insane, like me. They like games to be unforgiving to them.)
I think the medium difficulty on extremis felt more like it was a little past hard difficulty as described here.