Random idea, wonder what people think of it. Basically, your personal difficulty scales based on how many times you've died over a certain time period, similar to how the effective difficulty of a custom mob is calculated. (The maximum level would always be what you set it as, to prevent people who die rarely from getting set to difficulty 10 or something, perhaps) As always, this can be turned off in the player settings.
My understanding of this idea is that if you were on a hard difficulty & died multiple times, your difficulty level would be reduced. If that is what you are suggesting then it is a fantastic idea! I once took on Momentus solo on difficulty 10. Let's just say, I ended up with almost a stack of my own heads. I couldn't get out of the situation. Every time I respawned (my bed was near him) I got teleported to his feet & promptly stomped on.
I don't think this is going to work. Because one of the reasons to get a high difficulty when fighting a mini boss is to get a good loot drop. And for sure: sometimes you can die quite a lot, then its time to try and collect your gear and fight again (if you don't have voter tools). But that's all part of the game: trying to get the mob at a high difficulty in order to get higher rewards. Still... If this were to be an optional feature which can be turned on or off then it might work I suppose... I mean; then players can simply continue playing while the server more or less adjusts to their play style. If you die a lot then it is possible that things became too difficult and so things drop a nudge. If you don't die a lot while still being engaged in combat often enough then things become more difficult again. But I still can't help wonder if you don't risk starting off a flip-flop construction; one which goes constantly up and down again.
Where were you when I had this problem? I can't believe I didn't think of that! I had on a full set of voter gear, so I didn't loose my stuff but when I died it healed him. Took 20-30 min to finally end it & I died so many times I didn't even get good drops or tokens.
Some players decide to use the wastelands for collecting their head, so having their player difficulty based on the death of that isn't really ideal. Like Shel said, having it as an option would be better.