You lost me with your talk of flow and feedback, but you almost had me. The use of two F words seemed a little too forced.
On Mass Effect 2, I think I agree with both of you to some extent. A simple scaling from the standard difficulty setting up one really did add a lot of depth by requiring to be tactical instead of approaching ME2 like a twitch shooter, but moving from the second hardest to the very hardest simply added punishing frustration to the game.
Fallout NV really has two great examples of how not to do difficulty and how to do it at the same time. Hardcore mode seems like such a simple addition, but it fundamentally alters the way a lot of the game is played. It's an additional layer of depth and difficulty that is extremely well done when you consider its implications and the added reward of immersion and challenge. Scaling the difficulty using the ingame slider however, well, it's damn near identical to reducing the condition on your weapon and armor by 1/4. You end up with superhuman enemies who can take several bullets to the head without so much as a lofty sigh (granting, going from normal > hard isn't that insane, but very hard is ridiculous despite the fact that I do play on it because I like the raw challenge).
Then again, sometimes cranking up the difficulty in terms of raw numbers isn't a bad thing, you just have to be careful that you do it right and it fits the game world. Shooting people and watching them shrug off my shots in FNV breaks immersion, but the damaging scaling in Resident Evil 4's professional mode was pure bliss for me (probably because the game has checkpoints at every transition so I could easily retry an area if I didn't like my performance even if I managed to survive). On the other hand, I hated RE5's Professional mode; it was just too hard, and basically forced reliance on pre-upgraded infinite ammo badass weaponry.
I don't mind plugs for games by the way, but you have to actually sell me on why I'd like it. As is I have no interest in checking out the game you plugged.