While a truly dynamic difficulty setting would be neat, it would be insanely hard to balance right. Making sure there's enough challenge for those who want it without making it a struggle for those who don't, and trying to figure out how to get the difficulty to adapt to the player... that's a tall order.

I'm fine with difficulty settings, as they let people play as they want for the most part. I just hope that higher difficulties are somehow made actually more difficult, and not just giving inflated stats to enemies like 99% of games do. Having the same enemy who can kill you in one shot instead of three and now takes five times as much damage to kill isn't harder. It's just cheap and lazy. Harder would be the AI using more abilities, better use of cover, doing a better job of flanking, etc. Meanwhile the easy difficulties would have enemies lining up like Stormtroopers and firing wildly. :p