I'm greatly enjoying the challenge, and I think the current difficulty of the hard challenge levels is fine. There just need to be a bunch of easier levels so people can get used to the difficulty and learn the tactics needed to beat the really hard levels. I just beat the sludge mines with a warlord on my first try, and it was one of the closest wins I have pulled off in DD. I originally just wanted to check out the radius of the boss scouting preparation and to see what the level is all about. Then I got super annoyed at the difficulty (that level is hell, seriously), and many times I was sure I would lose. In the end I won by gradually converting just about everything in my inventory to pull out the GG piety I needed to get off one last hit and the damage to actually kill the boss with that hit. I had to play the last 15 or so turns of the game perfectly to squeeze out enough damage, and I did, and I won. This feels good, and I want other players to be able to experience this. Granted, I got really lucky with the subdungeon, but this still feels great.
TLDR: please don't lower difficulty of the hard challenge dungeons, instead add more medium difficulty levels and give some incentive to keep playing the regular dungeon.